Trepp Reports Another Record High for CMBS Delinquencies in January

---

According to New York-based researcher Trepp, another record high delinquency rate on commercial mortgage-backed securities (CMBS), reaching 9.34% in January, despite new issuances and falling spreads to Treasuries.

According to the new report, the office sector is weathering the downturn best, while industrial and multifamily continue to underperform.

The U.S. CMBS delinquency rate rose again in January with the percentage of loans 30 or more days delinquent, in foreclosure or REO climbing 14 basis points to 9.34%, the highest in history for U.S. commercial real estate loans in CMBS. The value of delinquent loans now exceeds $61.4 billion.

"While the rate continues to head higher, optimists can point to the fact that the rate of increase is significantly smaller than it was in the prior two months," said Manus Clancy, Managing Director of Trepp, LLC. "Pessimists can counter that the jump comes despite the fact that new issues continue to make their way into the calculation and servicers continue to resolve troubled loans."

The new deals - which theoretically should have low delinquencies for a while - will continue to put downward pressure on the rate as issuance continues to grow in 2011, according to Trepp. Similarly, the resolution of troubled loans will also help to reduce the rate. The rate of increase has averaged 25.3 basis points per month over the previous twelve months (after backing out the Stuyvesant Town impact in March and the Extended Stay Hotels impact in October).

 

---