More borrowers who were delinquent on their securitized commercial real estate loans brought their loans current as loan resolutions continued to outpace newly delinquent loans.
The 30-day delinquency rate on loans that are included in commercial mortgage-backed securities finished April at 4.59 percent.
CMBS delinquency improved from March, when the rate was 4.77 percent.
It was also better than 6.74 percent in April 2013.
The performance metrics were based on the $750.0 billion in CMBS rated by Morningstar Credit Ratings LLC.
On a dollar basis, $34.42 billion in CRE loans were past due. Delinquent balances have declined for 11 consecutive months.
“While roughly $1.05 billion in newly delinquent loans were reported with the April 2014 remittance, a much higher $2.11 billion in loan resolutions including loan payoffs, liquidations and returns to performing status, were also reported, resulting in a net decrease to the delinquent unpaid balance,” the ratings agency explained.
Morningstar projects that delinquent CMBS loans will fall to between $20 billion and $25 billion by the end of 2014, while the 30-day delinquency rate is expected to drop “well below 4 percent.”
Making the biggest improvement in April were industrial loans, with the 30-day rate declining 150 basis points to 7.8 percent.
Health care loan delinquency retreated 80 BPS to 7.2 percent.
Delinquency fell 20 BPS on hotel loans to 5.2 percent and on multifamily loans to 2.8 percent.
A 10-basis-point improvement was recorded for retail loans, landing the 30-day rate at 5.2 percent.
No change from March left the delinquency on office loans at 6.4 percent.
