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5-Year Low for Delinquent CMBS Loans

Despite deterioration in loan performance on some securitized commercial real estate loans, the overall volume of delinquent loans fell to the lowest level in a half-decade.

Servicers of loans included in commercial mortgage-backed securities brought the rate of 30-day delinquency down to 4.03 percent in November.

The CMBS delinquency rate has improved for four months in a row, while the amount of delinquent CMBS loans was at the lowest level since October 2009.

Morningstar Credit Ratings
LLC Tuesday released the statistics, which are based on the $768.26 billion in CMBS it rates.

CMBS delinquency was 4.15 percent as of Oct. 31 and 5.64 percent as of Nov. 30, 2013.

“As delinquency has fallen for 30 of the past 35 remittance cycles dating back to January 2012, Morningstar Credit Ratings LLC expects that the declining trend will continue throughout 2015,” the report stated. “That said, Morningstar cautions that expectations regarding the delinquency headline figures should be considered within the context of the upcoming wave of maturing loans.”

A 30-basis-point decline from October left the 30-day rate on multifamily loans at 2.3 percent.

The rate on hotel loans improved 20 BPS to 4.3 percent.

Retail property loan delinquency was off 10 BPS to 5.1 percent last month.

There was no change in the 5.8 percent 30-day rate on securitized office property loans.

Delinquency on health care property loans worsened 10 BPS, leaving the 30-day rate at 3.1 percent as of Nov. 30.

The worst month-over-month performance came from CMBS loans secured by industrial properties, with the rate climbing 20 BPS to 6.8 percent.

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