Although delinquencies on loans contained in commercial mortgage-backed securities (CMBS) seem to rise with each passing month, not all property types, loan vintages and markets are going through the same experience.
With retail properties in particular, the greatest problems are showing up in housing markets that went bust and areas where manufacturing has been hard hit in recent years, according to New York-based Trepp LLC. Moreover, loans issued in 2006 and 2007 are going bad at a higher rate than loans of other vintages.
Overall, Trepp measured the national CMBS delinquency rate at 9.39% at the end of February. That represented a new record — topping January’s figure by five basis points. By property type, the multifamily sector had the highest delinquency rate (16.6%), followed by lodging (14.6%), industrial (10.4%), retail (7.8%) and office (7.1%).
Retail Traffic Editor-in-Chief David Bodamer spoke with Thomas Fink, senior vice president and managing director at Trepp, about trends the firm is seeing for retail properties that are ending up with delinquent CMBS loans.
Bodamer: Can you talk about how retail compares with the other major property types?
Fink: We have some 24,000 retail properties in the pool we monitor, so that gives us a good selection to look at across the entire marketplace. Overall, retail properties are doing better from a delinquency-rate perspective than a lot of other properties, which might surprise a lot of people. Multifamily is the worst right now and retail is actually better than the overall average.