The commercial mortgage-backed security (CMBS) delinquency rate declined by 10 basis points in May to 4.97%, according to data from Trepp Inc.
“The decrease was primarily driven by some sizable resolutions in the office sector,” said Stephen Buschbom, research director at Trepp. “A little more than $2 billion in office loans resolved in May, either because the loans flipped back to non-delinquent during the month, or because the loan was disposed. Five office loans accounted for $1.7 billion of the $2 billion.”
The office market was the only sector with a declining delinquency rate, with dropping 44 basis points to 6.94%. Buschbom added that if the $2 billion in office resolutions had remained delinquent, “the overall May CMBS delinquency rate would have been almost 26 basis points higher at 5.33% and the May office delinquency rate would have been roughly 90 basis points higher at 8.48%.”
Year-over-year, the CMBS delinquency rate is up by 135 basis points from 3.62%.
Among the other commercial real estate sectors, the industrial delinquency rate increased 6 basis points to 0.50%, the lodging delinquency rate increased 25 basis points to 6.22%, the multifamily delinquency rate increased 37 basis points and the retail delinquency rate remained unchanged at 5.94%.
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