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Trepp Reports CMBS Delinquencies Are Slowing

Past due loans within commercial mortgage-backed securities (CMBS) rose 23 basis points in February, according to a new report from ""Trepp LLC"":http://www.trepp.com, a New York-based company that tracks the commercial real estate market.


The firm noted that it's the smallest month-to-month rise since September 2009. Over the last six months, Trepp has recorded an average increase of 50 basis points in the CMBS delinquency rate. When the company factors in rate changes for the past 12 months, the average increase has been 44 basis points.

The brief reprieve is welcome news for an industry struggling with rising defaults and looming loan maturities, but that's tempered by a quick reminder from


Trepp that CMBS delinquencies are still setting new records as the highest the industry has seen since the CMBS market took hold.

According to the firm's analysis, the percentage of loans 30 or more days delinquent hit 6.72 percent in February. That's up from 6.49 percent in January, 4.03 percent six months earlier, and just 1.67 percent a year ago.

Technically, the February rate should be even higher, since Trepp noted that the highly-publicized ""Stuy Town delinquency"":http://dsnews.comarticles/manhattans-stuy-town-project-heads-back-to-lenders-2010-01-25 is not reflected in the numbers. According to Trepp, it would add approximately 40 basis points to the CMBS delinquency rate, pushing it well above the 7 percent mark.

Overdue loans rose in every property sector. Hotel delinquencies jumped 33 basis points in February to 15.65 percent. The multifamily rate was up 16 basis points to 9.87 percent. The retail delinquency rate hit 5.74 percent, industrial increased to 4.75 percent, and the office sector rose to 4.33 percent.

Trepp reported that overall, the percentage of loans classified as seriously delinquent â€" meaning 60 or more days past due, in foreclosure, REO, or non-performing balloons â€" soared 30 basis points to 5.97 percent last month.