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US CMBS Delinquency Rate Lowers, Larger Drop on the Horizon

The Trepp CMBS Delinquency Rate fell for the second straight month in October, sinking five basis points. The current rate of 5.23% is 52 basis points lower year-to-date and 91 basis points lower year-over-year.

October saw $1.4B in newly delinquent loans, while over $400M in loans were cured. $1.2B worth of previously delinquent loans were paid off either at par or with a loss.

What's more, an even bigger drop is expected after the upcoming resolution of the $3B Stuyvesant Town/Peter Cooper Village loan in November. The Stuy Town loan, which was made in 2007 and is backed by more than 11,000 Manhattan apartments, has been REO for years. Its removal from the list of distressed assets could lead to a 60 basis point drop by itself.

Multifamily's 8% delinquency rate will plummet, which could push it to the best performing sector among the five major property types.