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Real Estate CMBS Loan Delinquency On The Decline In August

Mortgage, CMBS loans

CMBS delinquencies are on the decline for the first time since February, according to a report from California-based CRE analytics company Trepp.

Delinquency rates for US commercial real estate loans dropped eight basis points since July and are now at 4.68%—that's 77 basis points lower than the year-ago level.

Trepp research analyst Sean Barrie tells Bisnow the number of loans delinquent last month decreased by roughly $550M compared to July, and an additional $450M in CMBS loans was cured in August compared to the prior month.

The CMBS Delinquency Rate hit its peak in July 2012 at 10.3%, Sean says, but since then the rate has dropped as low as 4.15% in February this year.

Delinquent loans paid off in August amounted to $1B, and after removing the distressed assets from the total delinquent loans calculated, the rate dropped by 22 basis points.

"There have been periods of stagnancy and even increases since February," Sean says. "But by and large, the rate has been on a steady decline since 2012."