Delinquency Rate For Commercial Mortgage-Backed Securities In Largest Decline Of 2022

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Zinger Key Points
  • The record high for the CMBS delinquency rate was 10.34% in July 2012.
  • All of the major commercial property sectors saw improvements in May.

The delinquency rate for commercial mortgage-backed securities (CMBS) took on its biggest decline of the year in March, according to new data from Trepp LLC.

What Happened: Last month’s CMBS delinquency rate was 3.14%, a 37 basis points (bps) decline from April. The rate has been plummeting for 22 of the last 23 months, with only a brief uptick in late 2021.

“At the current improvement rate, the overall delinquency rate could fall below 3% in the coming months, a prospect that seemed unthinkable during the COVID-19 pandemic,” said Manus Clancy, senior managing director at Trepp. “As a refresher, the delinquency rate hit 10.32% in June 2020 amid the market volatility caused by the pandemic. This was near the all-time high of 10.34% seen in July 2012.”

See Also: Housing Beat: Mortgage Rates Flatten As Sun Belt Sees New Boom In Home Building

How It Happened: All of the major commercial property sectors saw improvements in May, with the greatest declines recorded in the retail sector (down 79 bps to 6.97%) and lodging sector (down 51 bps to 5.83%).

Other sectors recording declines in their delinquency rates were multifamily (down 18 bps to 1.01%), office (down 8 bps to 1.63%) and industrial (down 8 bps to 0.38%).

“Year-over-year, the overall U.S. CMBS delinquency rate is down 302 bps,” said Clancy.

Photo: Pete Linforth / Pixabay

Posted In: NewsReal EstateCMBScommercial mortgage-backed securitiescommercial real estateIndustrialLodgingmultifamilyOfficeretailTrepp LLC