Jump Comes One Month After Delinquencies Matched Lowest Total in a Year
NEW YORK, April 3, 2012 — Trepp, LLC, the leading provider of information, analytics and technology to the CMBS, commercial real estate and banking markets, released its March 2012 U.S. CMBS Delinquency Report today (available at http://www.trepp.com/knowledge/research).
The delinquency rate for U.S. commercial real estate loans in CMBS jumped 31 basis points in March to 9.68%. The value of delinquent loans is now $58.1 billion.
Newly delinquent loans – over $5 billion in total – put 91 basis points of upward pressure on the rate. Multifamily and Office loans were the worst performing property types with each suffering significant losses. The Office delinquency rate was up 37 basis points, setting a new all-time high of 9.41%. The Hotel delinquency rate dropped 42 basis points and was the only major property type to improve.
For the second straight month, loss resolutions were relatively modest. At about $1 billion, the number was lower than what the CMBS market has been seeing in recent months. The removal of these loans from the delinquent loan category attributed about 15 basis points of downward pressure on the delinquency rate. Loans that were cured in March put an additional 43 basis points of downward pressure on the rate.
"We predicted late last year that the delinquency rate would rise largely on the impact of 2007 loans coming due, and today's report underscores that forecast. After the rate fell nicely in January and February, we were cautiously hopeful that we'd be wrong. This month's report shows that the market has a lot of wood to cut and that a rate north of 10% can't be ruled out," said Manus Clancy, senior managing director at Trepp.
Chart: http://www.ereleases.com/pic/2012-Delinquency-Rates.jpg
For additional details, request the March U.S. CMBS Delinquency Report at http://www.trepp.com. For daily CMBS and bank trading ideas, credit events and commentary, register for TreppWire or follow us on Twitter.
About Trepp, LLC
Trepp, LLC is the leading provider of information, analytics and technology to the CMBS, commercial real estate and banking markets. Trepp provides primary and secondary market participants with the tools and insight they need to increase their operational efficiencies, information transparency and investment performance. For more information, visit http://www.trepp.com.
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