Wednesday, June 2, 2010

CMBS Delinquency Rate Jumps to 8.42% in May

The delinquency rate for commercial real estate loans in commercial mortgage-backed securities (CMBS) continued to move higher in May as the monthly rate of increase has demonstrated remarkable consistency. For seven of the last eight months, the rate of increase in delinquencies has been between 37 and 49 basis points. The only exception was February of this year when the delinquency rate nudged up only 22 basis points.

Overall in May, the percentage of loans 30 or more days delinquent, in foreclosure, REO, or non-performing balloon jumped 40 basis points, putting the overall delinquency rate at 8.42%.

Delinquency level of 8.42% is once again the highest in history of CMBS industry

If defeased loans were taken out of the equation, overall delinquency rate would be 8.96%

The percentage of loans seriously impaired moved up almost in lockstep with the headline number. The percentage of loans seriously delinquent (60 days +, in foreclosure, REO, or non-performing balloon) jumped 41 basis points to 7.55%.

Historical Perspective

Four of Five Major Property Types Show Weakness