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CMBS Delinquency Tumbles 50 BPS in Q4

The quarterly performance of securitized commercial real estate loans strengthened more than for any other investor type, and the improvement has continued into this year.

Among CRE lender types, the biggest decline in delinquency was made on loans included in commercial mortgage-backed securities, with the 30-day rate plunging 50 basis points from the third quarter to 5.11 percent as of the final quarter of 2014.

In the fourth-quarter 2013, CMBS delinquency was 6.86 percent.

The last time the 30-day CMBS rate was this low was in the third-quarter 2009, when it stood at at 4.07 percent.

Since the end of last year, CMBS 30-day delinquency has fallen another 17 basis points, according to
a report from Trepp LLC, which said the 30-day CMBS rate of 5.58 percent as of February was down from 5.66 percent in January and 6.78 percent in February 2014.

Trepp noted that
retail property loans led the improvement with 30-day delinquency declining 22 BPS from January to 5.38 percent. Multifamily delinquency dropped 16 BPS to 8.65 percent, while securitized office loan delinquency fell 4 BPS to 6.14 percent.

But the past-due rate on CMBS lodging loans climbed 11 BPS to 4.51 percent in February, and a 19-basis-point rise was recorded for industrial property loans, which ended last month at 7.39 percent.

CRE loan assets owned by banks and thrifts had a 90-day delinquency rate of 1.14 percent as of the end of last year, 15 BPS better than at the end of the third quarter and 56 BPS lower than at the end of 2013, MBA’s report said.

Bank-owned loans have not performed this well since the
first quarter of 2008, when the rate was 1.05 percent.

A 4-basis-point decline from the third quarter left Fannie Mae’s 60-day multifamily delinquency at 0.05 percent. The rate was 0.10 percent as of the fourth-quarter 2013.
While quarterly MBA data are only available back to 2006, annual data indicate that Fannie’s multifamily delinquency rate was last this low in 2000 at 0.04 percent..

Fannie has since reported that 60-day multifamily delinquency rose to 0.07 percent in January.

MBA said Freddie Mac’s 60-day multifamily delinquency inched up a basis point from the third quarter to 0.04 percent, though Freddie’s rate was down from 0.09 percent one year earlier. Freddie reported that its multifamily delinquency rate slipped to 0.03 percent in January.

At life insurance companies, CRE loans had an 0.08 percent 60-day delinquency rate as of the fourth-quarter 2014, 3 BPS higher than three months earlier and 12 months earlier.

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