The nation’s delinquency rate for commercial mortgage-backed securities is grimly close to matching the highest rate ever recorded.
Just two months after matching its lowest reading in a year, the CMBS delinquency rate reversed course, jumping 12 basis points in April to 9.8%, the second highest rate ever, according to analytics firm Trepp. The rate jumped 31 bps in March.
The highest delinquency rate on record arrived July 2011 when the rate topped out at 9.88%. One year ago, the rate stood at 9.65%
February and March flew by with two months of modest loan loss resolutions of $1 billion or less, with special servicers picking up steam in April. More than $1.4 billion in loss resolutions occurred in April. The removal of these loans from the delinquent loan category attributed about 24 basis points of downward pressure on the delinquency rate.
However, about $3.8 million in newly delinquent loans put 64 bps-worth of upward pressure on the rate, while cured loans pushed the rate down 33 bps.
“Added together, the impact of the loan resolutions, the effect of loans curing and the effect of newly delinquent loans created a net increase of seven basis points in the rate,” Trepp explained.
“The remaining five basis points are a result of additions and subtractions to the denominator due to new CMBS issuance being added, loans paying off, and other factors.”
Click on the chart below to see that four out of the five major property types witnessed their delinquency rates fall in April.