Delinquency rates resumed their upward trek last month, resulting in over $2B of newly delinquent CMBS loans in February, the highest levels since August 2015.
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CMBS delinquencies — which include loans with past due payments of at least 60 days, foreclosures and REOs — have been steadily climbing for the past 12 months, up 5.3% or 12 basis points month-to-month, and about 116 bps year-over-year.
Trepp analyst Sean Barrie said a growing amount of maturing debt has exacerbated the problem: $9B worth of CMBS loans matured last month alone.
“Most loans don't make it to the maturity date and are probably not in the best quality,” Barrie said. “Once that happens they probably become delinquent and that drives the rate up.”
The office sector was to blame for propelling the delinquency rate higher last month. A 54 bps increase (to 7.65%) in unpaid debt for office properties offset the gains made by the other four property sectors.
“Many offices became delinquent since last month, and the office delinquency rate has been the highest by property type over the past couple of months. Retail was pretty high too for a while but that’s [leveled] off,” Barrie said.
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