The delinquency rate for commercial mortgage-backed securities (CMBS) surged this month 51 basis points to 7.86%, according to a data report from Trepp Inc. One year ago, the rate was at 7.23%.
Thomas Taylor, senior manager for research at Trepp, attributed July’s spike to “a group of very large loans whose status moved to non-performing matured balloon or foreclosure. The five largest newly delinquent loans accounted for $2.6 billion of the $6.0 billion in newly delinquent balances, or roughly 44%. They included a showroom and exhibition-space portfolio split between North Carolina and Nevada, two Times Square properties in New York, a Chicago office tower, and a Seattle office portfolio.”
Four of the five property sectors tracked by Trepp recorded CMBS delinquency rate increases in July. Multifamily posted the largest increase, rising 46 basis points to 7.69% — Taylor said this occurred as “a wave of Ohio, Texas, and New York multifamily loans became 30 days delinquent.”
The office sector’s delinquency rate increased 34 basis points to 11.91% while the lodging sector increased 13 basis points to 5.35% and the retail sector was up by 6.66%. Only the industrial sector posted a delinquency rate decline with a seven basis points drop to 1.13%.
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