2020 CMBS Delinquency Rates

Trepp CMBS Delinquency Rate in June is 10.3 percent, a jump of 317 basis points over the May number.
Source: Trepp
Source: Trepp

At one point in June, it appeared that a new all-time high for CMBS delinquencies would be reached. However, when the final numbers were posted, the 2012 high remains the peak for the time being. Trepp CMBS Delinquency Rate in June is 10.3 percent, a jump of 317 basis points over the May number. About 5 percent of that number represents loans in the 30 days delinquent bucket while another 3.2 percent are now 60 days delinquent. The numbers could be headed still higher in July. That’s because 4.1 percent of loans by balance missed the June payment but remained less than 30 days delinquent. That percentage of loans in or beyond grace period (the A/B loans as we refer to them) has fallen from 8.1 percent in April and 7.6 percent in May.

Manus Clancy is Senior Managing Director of Applied Data & Research.

—Posted on Jul. 22, 2020


Source: Trepp
Source: Trepp

The surge in CMBS delinquencies that most industry watchers were anticipating came through in May–but the size of the jump surprised to the downside. In April 2020, Trepp’s CMBS Delinquency Rate registered at 2.3 percent. About 8 percent of loans by balance missed their April loan payments as we noted in last month’s delinquency report. If all those loans became 30 days delinquent this month, the rate would have topped 10 percent which would have threatened the all-time high recorded in 2012. Many of the loans that were in the “grace” or “beyond grace” period either stayed in that category or reverted to “current,” keeping the jump in the delinquency rate from being worse.

The Trepp CMBS Delinquency Rate in May logged its largest increase since we started tracking this metric in 2009. The May reading is 7.2 percent, a jump of 481 basis points over the April number. Almost 5 percent of that number is represented by loans in the 30-day delinquent bucket. Given that about 8 percent of loans had missed payments for the April remittance cycle, the fact that delinquencies went up less than 5 percent has to be viewed as a small “win.”

Manus Clancy is Senior Managing Director of Applied Data & Research.

—Posted on Jun. 24, 2020


 
Source: Trepp
Source: Trepp

The Trepp CMBS Delinquency Rate saw its biggest jump in almost three years in April 2020. The April reading is 2.3 percent, a jump of 22 basis points over the March number. The last time the delinquency rate saw a bigger jump was in June 2017–when the industry was still talking about the “wave of maturing” 2007 loans. While an increase in the delinquency rate was probably expected by most industry watchers, the magnitude of the move likely surprised many by its modest size.

For now, many are eyeing the loans that have transferred to special servicing as an indicator of what is to come. The percentage of loans with the special servicer grew from 2.8 percent in March to 4.4 percent in April. Prior to the April servicer data, 2.3 percent of all lodging loans were in special servicing. In April, that ballooned to 11.4 percent. The balance of loans in special servicing grew from $14.1 billion to over $22 billion. The new additions to special servicing increased ten-fold between March and April.

Manus Clancy is Senior Managing Director of Applied Data & Research.

—Posted on May 22, 2020


 
Source: Trepp

The Trepp CMBS Delinquency Rate inched up in March, a rare break from the downward trend that has extended for almost three years. For those looking for a large COVID-19 induced uptick in March, that was always unlikely. With most loans having payments due on the first of the month, most borrowers for performing loans would likely have made their March payment–this was before the industry gained more clarity on the magnitude of the outbreak’s disruption to businesses.

The March reading was 2.1 percent, an uptick of three basis points from February. At least for now, heavy new issuance from late last year added performing supply to the denominator and some of the defaulted legacy loans continued to get resolved away in February. The downward pressure of both variables on the delinquency rate should be reduced in the coming months with new issuance having stalled, distressed property sales being postponed, and COVID-19 related delinquencies starting to represent a new inflection point. Time will tell if the February level of 2.0 percent represents a post-crisis low for a long time to come.

The delinquency rate started to fall after June 2017 when CMBS delinquencies totaled 5.8 percent. Since then, the rate has fallen in 27 of the last 33 months. The all-time high of 10.3 percent was registered in July 2012.

Manus Clancy is Senior Managing Director of Applied Data & Research.

—Posted on Apr. 24, 2020


Source: Trepp
Source: Trepp

The Trepp CMBS Delinquency Rate dropped once again in February, continuing a trend that has extended to nearly three years by now. Heavy new issuance late last year added performing supply to the denominator while defaulted legacy loans continually get resolved away in early-2020.

The February reading is 2.0 percent, a decline of 10 basis points from the month prior, which is once again another new post-crisis low. The delinquency rate started to fall after June 2017 when CMBS delinquencies totaled 5.8 percent. Since then, the rate has fallen in 27 of the last 32 months. The all-time high of 10.3 percent was registered in July 2012.

Manus Clancy is Senior Managing Director of Applied Data & Research.

—Posted on Mar. 26, 2020


Source: Trepp

The Trepp CMBS Delinquency Rate dropped sharply in January as heavy new issuance continued to add performing supply to the denominator and defaulted legacy loans were resolved away. The January reading is 2.1 percent, a decline of 20 basis points, and another new post-crisis low. The delinquency rate started to fall after June 2017 when CMBS delinquencies totaled 5.8 percent. Since then, the rate has fallen in 26 of the last 31 months. The all-time high of 10.3 percent was registered in July 2012.

Manus Clancy is Senior Managing Director of Applied Data & Research.

—Posted on Feb. 21, 2020