Trepp Reports CMBS Delinquency Rate Dips

(Illustration courtesy of Trepp)

Trepp, New York, reported the commercial mortgage-backed securities delinquency rate dipped back below 5% in May.

Trepp’s monthly CMBS Delinquency Report called the decrease “a welcome sign after last month’s surge.”

Overall, the delinquency rate declined 10 basis points to 4.97%. Trepp attributed the decrease to some sizable office-sector resolutions. “A little more than $2 billion in office loans resolved in May, either because the loans flipped back to non-delinquent during the month, or because the loan was disposed,” the report said. It noted five office loans accounted for $1.7 billion of the $2 billion in resolutions.

If those $2 billion in office-sector resolutions had remained delinquent, the overall May CMBS delinquency rate would have been 25-plus basis points higher at 5.33% Trepp reported.

The report said the office resolutions were partially offset by approximately $1.2 billion in newly delinquent office loans in May. “In addition, the retail, lodging and multifamily sectors also had sizable amounts of newly delinquent loans,” Trepp said.

The percentage of loans in the 30-days delinquent bucket now equals 0.35%, up 12 basis points for the month, Trepp said. The overall U.S. CMBS delinquency rate is up 135 basis points from one year ago.

Trepp reported the percentage of loans that are seriously delinquent (60-plus days delinquent, in foreclosure, REO, or non-performing balloons) dipped to 4.62%, down 22 basis points for the month.