CMBS delinquencies hit all-time high in May

The delinquency rate on U.S. commercial mortgage-backed securities reached an all-time high in May, hitting 10.04%, CMBS analytics firm Trepp said Wednesday.

That compares to a delinquency rate of 9.51% in December and reflects a spike in delinquencies as CMBS loans securitized in 2007 began to reach their maturity date this year, the research firm said.

Overall, the U.S. CMBS delinquency rate rose 24-basis points in May to 10.04%. Over the past three months, the delinquency rate rose 67-basis points. Comparatively, the same delinquency rate was at 9.60% a year ago.

“Whether the rate creeping into double digits for the first time carries some psychological impact remains to be seen,” Trepp said in its CMBS update.

Trepp forecasted an increase in CMBS delinquencies back in December, suggesting that loans originated five years ago would start to mature, creating the possibility of missed payments.

For the most part, Trepp is sticking with that forecast, but is somewhat confident in the 2007 originations since many of those loans reaching maturity will decrease after this year.

“As a result, the upward pressure that this has put on the rate should be coming to an end,” Trepp wrote.

Loans driving CMBS losses in May were primarily industrial, multifamily and hotel loans, but four of the five property types experienced an uptick in delinquencies.

The hotel delinquency rate is now well above 12%, surging 172-basis points in May. The industrial delinquency rate is up 46-basis points, hitting a rate of 13%. Office loans are now experiencing a 10.26% delinquency rate, while the retail delinquency rate holds at 8.07%. The multifamily delinquency rate fell one-basis point in May to 15.17%.

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