The number of modifications on commercial real estate loans held in securities trusts has ""accelerated dramatically"" in 2010, according to ""Trepp LLC"":http://www.trepp.com, a New York-based company that tracks the commercial real estate market.
[IMAGE]So far in 2010, loan modifications have already surpassed the total number of mods done in 2008 and 2009 combined, Trepp reports. At this pace, 2010 modifications are set to triple those completed last year.
With servicers stepping up resolutions of troubled commercial real estate loans, increases in delinquency numbers are beginning to moderate.
Trepp's data show that although the overall delinquency rate for commercial mortgage-backed securities (CMBS) rose again in July to a new all-time high of 8.71 percent, the rate of increase was significantly diminished.
[COLUMN_BREAK]The rate increase was the smallest in about a year, up just 12 basis points last month and comes on the heels of June's modest increase of 17 basis points.
In June, many market observers cautioned that one month does not a trend make, Trepp noted. But in July, the company said, the numbers were even more encouraging, ""giving the market hope that perhaps the darkest days for the CMBS market [are] over.""
To underscore that point, Trepp says one need only look at the levels since September 2009. For the last 10 months prior to July, the rate of increase in delinquencies had averaged 37 basis points per month.
According to Trepp's latest report, hotel delinquencies fell 60 basis points in July. But at 18.41 percent, the hotel sector still claims the highest delinquency rate among the major property types.
The multifamily delinquency rate was down 9 basis points â€" the second highest of the major property groups at 14 percent.
Office delinquencies jumped 31 basis points to 6.35 percent.
After a 22 basis point increase, the retail delinquency rate is now approaching 7 percent.
Delinquencies on industrial properties climbed 56 basis points last month, pushing the rate above 6 percent, but Trepp says this sector is still the best performer among major property types.