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New 8-Year Low for CMBS Delinquency

After falling to the lowest level in more than eight years, the rate of delinquency on securitized commercial real estate loans took another tumble. Office loans led the decline.

Thirty-day delinquency on loans that are part of commercial mortgage-backed securities concluded November 2017 at 2.54 percent.

The last time that the rate of late payments was that low for CMBS loans was in May 2009, when 30-day delinquency was previously reported at 2.275 percent.

Those details were provided by Morningstar Credit Ratings LLC based on $823 billion in CMBS that it rates.

Delinquency, which has been lower each month since June 2017, was 2.68 percent as of Oct. 31, 2017, and 2.98 percent as of Nov. 30, 2016.

“Morningstar Credit Ratings LLC expects the declining trend to continue in 2018 as servicers continue to wind down their legacy portfolios and originations outpace new problem loans,” the report said.

The biggest improvement over the preceding month with was office building CMBS loans, which plunged 69 basis points to 5.49 percent.

Securitized hotel loan delinquency
tumbled 30 BPS to 2.71 percent as of Nov. 30.

A 27-basis-point drop from October left the 30-day rate on industrial CMBS loans at 4.62 percent.

With no month-over-month change, the delinquency rate was 6.12 percent on securitized retail loans and 2.05 percent on healthcare CMBS loans.

The only property type to experience deterioration versus October was multifamily, with the 30-day rate rising 3 BPS to 0.45 percent.

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