Trepp reported that the delinquency rate for multifamily commercial mortgage-backed securities (CMBS) loans fell in February. It had been trending higher since last April. The overall CMBS delinquency rate also dropped, falling 26 basis points.
Overall CBMS delinquency rate falls
For delinquencies, Trepp focuses on loans that are 30 or more days delinquent. The current CMBS delinquency report provides data through February. While it only looks at CMBS loans, it breaks out results by the type of property covered by the loans.
The delinquency rate for loans on multifamily property was 4.46 percent, down 16 basis points from last month’s reading. One year ago, the delinquency rate for CMBS loans for multifamily property was 1.81 percent. While the multifamily CMBS delinquency rate jumped higher in both November and December, it was up only 4 basis points last month, so the decline this month may signal the start of a new trend. However, a similar pattern existed leading up to October’s decline and it was followed by November’s surge.
Trepp found that the overall delinquency rate of CMBS loans in January was 6.30 percent, the second monthly decline after 7 straight months of increases. It is up from its level of 4.71 percent one year ago.
The report noted that loans that are past their maturity date but are still current on their interest payments are not counted as being delinquent. However, if they were included, the overall delinquency rate on CMBS loans would rise to 8.18 percent from the level reported above.
The history of the overall and multifamily CMBS delinquency rates as reported by Trepp since January 2020 is illustrated in the chart, below.
Office delinquency rate falls
The other property types whose CMBS loan delinquencies were examined by Trepp were industrial, lodging, office and retail.
This month, the delinquency rates fell for all property types except for lodging. Declines in the delinquency rates for multifamily, industrial, retail and office properties overcame a modest rise in the CBMS delinquency rate for lodging property.
The delinquency rates on CMBS loans on office property saw the largest decline this month, falling 45 basis points to 9.78 percent. This is the first time in 4 months that the delinquency rate for office property has been under 10 percent. The delinquency rates on industrial property fell 12 basis points to 0.34 percent. The delinquency rate for retail fell 3 basis points to 7.49 percent.
The full Trepp delinquency report can be found here.
