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CMBS Delinquency See Saws Lower

Mortgage News

After worsening in March, performance improved on securitized commercial real estate loans. Industrial property loans led the decline.

The rate of 30-day delinquency on loans that are held in commercial mortgage-backed securities worked out to 2.81 percent in April.

The past-due CMBS rate moved slightly lower compared to a month earlier, when delinquency worsened 7 basis points to 2.83 percent.

Morningstar Credit Ratings LLC, which delivered the data based on the $779 billion in CMBS it rates, noted that the decline was the result of “a sizable increase in the balance of outstanding loans.”

Improvement in CRE loan performance was far more dramatic versus the same month last year, when the 30-day rate was 3.75 percent.

“Morningstar Credit Ratings LLC expects turbulence later this year when many of the maturing loans written at the height of the market will have difficulty refinancing because they remain over-leveraged,” the report said.

Loan performance on securitized industrial property loans was the most improved, with the 30-day rate retreating 24 BPS from March 2016 to 4.28 percent.

A 6-basis-point decline left delinquency on retail property loans at 4.97 percent as of April 30.

At 0.61 percent, the 30-day rate on multifamily loans was down 2 BPS from March.

Office building loans had a 4.98 percent 30-day rate, a basis point lower than in the previous report.

No change from March left the 30-day rate on CMBS loans secured by healthcare properties at 2.49 percent.

An increase of 3 BPS put the hotel delinquency rate at 2.70 percent as of the end of last month.

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