The delinquency rate for US commercial real estate loans in CMBS was 5.18% in January, down five basis points from December, according to The Trepp CMBS Delinquency Rate report.
This move is the first rate decrease in five months, and just the second in the past eleven months. Though the large amount of debt slated to mature in 2017 will mitigate the likelihood of future rate drops, that trend was bucked for at least one month.
The delinquency rate is now 86 basis points higher than the year-ago level.
The amount of CMBS loans becoming newly delinquent continues to rise, as that total reached nearly $2 billion in January. However, loans that were previously delinquent but paid off with a loss or at par totaled about $1.8 billion.
The removal of those previously distressed assets helped offset the impact of new delinquencies. Additionally, just over $700 million in loans were cured last month.
"The volume of maturing CMBS debt that could not be refinanced at its maturity date continued to surge last month," said Manus Clancy, Senior Managing Director at Trepp. "Though this would normally lead to a higher monthly delinquency rate, the rate was pushed lower by an unusually large number of resolutions for delinquent loans. Whether this is a blip or the beginning of a trend remains to be seen."
The largest delinquency rate increase among major property types in January was incurred by the industrial sector, as that segment's reading jumped 40 basis points to 6.02% last month. Apartment loans remain the best performing major property type, but that sector's rate surged 24 basis points to 2.96% in January. The retail sector posted last month's largest rate improvement among major property sectors, as that reading fell 27 basis points to 6.10%.