Following an uptick in June, CMBS delinquencies continued their downward trend in July,Trepp LLC said Monday. The Trepp CMBS Delinquency Rate inched down three basis points last month to 5.42%, with the rate of seriously delinquent loans at 5.22%.
Trepp says the delinquency rate has fallen 23 times over the past 27 months. The rate at July 31 is 62 bps lower than the year-ago level, and 33 bps lower year-to-date.
During July, $1.4 billion in loans became newly delinquent, putting 27 bps of upward pressure on the delinquency rate. About $600 million in loans were cured last month, which conversely helped push delinquencies lower by 12 bps.
CMBS loans that were previously delinquent but paid off with a loss or at par totaled slightly more than $800 million in July. Removing these previously distressed assets from the numerator of the delinquency calculation helped move the rate down by 15 bps, according to Trepp.
Although the general trend for CMBS delinquency is improvement, July’s rising tide did not lift all boats. Trepp says retail improved by three bps to 5.51% and hotels by five bps to 3.7%; lodging remains the best performing major property type. However, industrial late-pays rose 29 bps to 7.41%, while office and apartments each inched up three bps to 5.93% and 8.76%, respectively. Apartment loans continued their run as the worst performing among the major property types.
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