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Multifamily Drives Down CMBS Delinquency

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Driven by multifamily performance, the past-due rate on securitized commercial real estate loans fell to the lowest level in more than six years.

Loans that were at least 30 days past due made up 3.09 percent of all loans included in commercial mortgage-backed securities as of Jan. 31.

That was a huge improvement compared to the end of last year, when the CMBS 30-day delinquency rate worked out to 3.43 percent.

The statistics were based on the $780 billion in CMBS rated by Morningstar Ratings LLC.

Delinquency on securitized CRE loans
has also tumbled from the same point last year, when the rate was 3.89 percent.

Morningstar noted that while current delinquency levels are near the level of the third-quarter 2009,
“delinquency remains significantly above lows experienced in 2007.”

Making the biggest impact on the latest CMBS delinquency rate were securitized multifamily loans, with the 30-day rate plunging 111 basis points from Dec. 31, 2015, to 0.65 percent in January.

“The $3 billion payoff of the Stuyvesant Town and Peter Cooper Village apartment property in New York had a significant impact on both delinquency and special-servicing exposure,” the New York-based ratings agency explained in the report.

The 30-day rate on CMBS loans secured by office buildings sank 38 BPS from the close of 2015 to 4.93 percent.

On securitized retail property loans, the rate of late payments receded 11 BPS to 5.24 percent as of Jan. 31, 2016.

A one-basis-point month-over-month increase left the 30-day rate on healthcare property loans at 2.48 percent in the latest period.

Delinquency on industrial property loans included in CMBS deteriorated by 18 BPS to finish January at 4.79 percent.

The worst month-over-month performance was experienced on securitized hotel loans, with the 30-day rate surging 187 BPS to 4.50 percent.

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