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Trepp analysts expect CMBS delinquencies to drop after highest month on record

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The percentage of delinquent commercial mortgage-backed securities increased in September to the highest rate ever recorded by CMBS data analytics firm Trepp, up 13 basis points to 9.05%. However, this is the smallest month-over-month increase recorded in 2010, and Trepp analysts expect the rate to dip much further in next month's statistics. September was the first month the CMBS delinquency rate pushed over 9%. The rate was 8.92% in August and 4.36% one year ago. The percentage of seriously delinquent loans — 60-plus days delinquent or in foreclosure — jumped 16 basis points to 8.31%. The lodging sector had the highest rate of delinquencies in September at 19.33%, followed by multifamily properties (14.43%), retail (7.13%), office (6.62%) and industrial (6.48%). Analysts at Trepp say they expect the CMBS delinquency rate to drop because the $3.9 billion deal to purchase the Extended Stay Hotels closed this week. The portfolio was purchased by The Blackstone Group in conjunction with Centerbridge and Paulson. The Extended Stay Hotels portfolio accounted for 0.5% of all the CMBS loan Trepp includes in its data universe. "Accordingly, delinquencies for October could show a dip of about 35 basis points overall," the firm said in commentary. Trepp said the majority of change would manifest in the hotel sector, which could show a drop of 500 basis points. Write to Christine Ricciardi.

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