The U.S. CMBS delinquency rate decreased to 5.44 percent in July, according to Trepp. It is a decrease of 5 basis points from June. This is the second consecutive month in which it has decreased.
The August 2017 rate is now 76 basis points higher than the year-ago level and 21 basis points higher year-to-date. The reading hit a multi-year low of 4.15 percent in February 2016. The all-time high was 10.34 percent in July 2012.
After hitting a post-crisis low in February 2016, the reading climbed consistently for more than a year as loans from 2006 and 2007 reached their maturity dates and did not pay off via refinancing. In the 16 months between March 2016 and June 2017, the delinquency rate moved up 13 times. However, the rate has recently shown signs of subduing. With the wave of maturities becoming more of a ripple and the continued resolution of distressed loans, the largest monthly rate increases should be behind us.
About $1.1 billion in loans became newly delinquent in August, which put 27 basis points of upward pressure on the rate. More than $400 million in loans were cured last month, while just over $1 billion in previously delinquent CMBS loans were resolved with a loss or at par in August. These changes helped shave 10 and 25 basis points off of the August reading, respectively.
Delinquency readings for three of the five major property types fell in August. These include industrial, which dropped 41 basis points to 6.55 percent; hotel, which fell 19 basis points to 3.49 percent; and retail, which moved down 2 basis points to 6.61 percent. Only the office sector finished the month with a higher month-over-month rate, moving up 7 basis points to 7.31 percent. Multifamily was unchanged at 2.91 percent.