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Wednesday, January 5, 2011

CMBS Overall Delinquency Rate Up 52% Year Over Year (Trepp) as REITS Continue Launch

Overall CMBS Delinquencies Hit a
Record 9.2% in December as
REITS Spend 2010 Partying in the Exosphere.

Trepp Reports CMBS Delinquency Rate Hits
Record High of 9.2% in December Despite Market Optimism

(NEW YORK – JANUARY 5, 2010) - Trepp, LLC, the leading provider of CMBS andcommercial mortgage information, analytics and technology to the global securities and investment management industry, released today its December 2010 Delinquency Report. This month’s report contains a special section on the Major CMBS Events of 2010 as well as Delinquency Rate and Triple A Spread charts covering the past 10 years.

The U.S. CMBS delinquency rate rose again in December with the percentage of loans 30 or more days delinquent, in foreclosure or REO climbing 27 basis points to 9.20%, the highest in history for U.S. commercial real estate loans in CMBS. The value of delinquent loans now exceeds $61.5 billion.

The decline in the delinquency rate in October 2010 now appears to have been a blip, as the rate has since increased by 62 basis points. December’s 27 basis point jump comes despite the fact that new issues continued to make their way into the calculation and servicers continued to resolve troubled loans. The new deals - which theoretically should have low delinquencies for a while - will continue to put downward pressure on the delinquency rate as issuance continues to grow in 2011. Similarly, the resolution of troubled loans will also help to lower the rate.

“Many have speculated that between the emergence of new CMBS lending, the resolution of many troubled CMBS loans and an uptick in trophy property sales, that the commercial real estate crisis was nearing its final stages,” said Manus Clancy, Managing Director, Trepp. “The December delinquency rate underscored that there still may be some nasty surprises in store even as the market shows some signs of healing.” Trepp Report

Delinquency Rates (Percent 30 Days + delinquent)
  • 8.97% Industrial (up 125% YOY)
  • 14.31 % Lodging (up 11% YOY)
  • 16.48% Multi-family (up 78% YOY)
  • 6.93% Office (up 103% YOY)
  • 7.86% Retail (up 43% YOY)
  • 9.20% Overall (up 52% YOY)

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