CMBS Delinquency Rate Hits a Record 8%

The delinquency rate for commercial mortgage-backed securities (CMBS) loans hit a record 8.02% in April, according to New York-based data firm Trepp LLC. A year earlier, the delinquency rate was 2.45%.

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The percentage of CMBS loans at least 30 days delinquent, in foreclosure, or part of lenders’ real estate owned, rose 41 basis points in April from March, Trepp noted in its monthly delinquency report.

The latest jump in CMBS delinquencies was not as steep as in March, when the rate rose 89 basis points, according to Trepp. About half the March increase was attributed to the delinquency of the massive Stuyvesant Town loan in New York.

The percentage of loans at least 60 days delinquent, meanwhile, jumped 48 basis points to more than 7% in April. The increases represent a historical high for CMBS loan delinquencies, notes Trepp.

The current rising rates represent a stark contrast to a year ago. In April 2009, the rate of seriously delinquent loans, 60 or more days past due, was 1.78%. Six months ago, the rate of loans seriously delinquent was 3.91%.

Multifamily loans represented the only property type to show a decrease in the monthly delinquency rate, Trepp reported. In March, 13.19% of multifamily CMBS loans were at least 30 days delinquent, compared with 13.06% in April.

Despite the monthly decline, the delinquency rate for multifamily CMBS loans in April 2010 remained considerably higher than a year earlier, more than double the rate of April 2009, 5.24%. Among the property types, the highest delinquency rate belonged to lodging, which recorded a 17.16% delinquency rate in April, compared with 2.63% a year earlier.

Retail loan delinquencies reached 6.44% in April, from 6.03% in March, while office loan delinquencies jumped to 5.37% in April from 4.73% in March.

CMBS spreads, meanwhile dropped by 60 to 70 basis points for April, defying the market’s weakening fundamentals and rising delinquency rates, according to Trepp. In particular, 10-year super senior spreads on recent CMBS vintage dropped more than 60 basis points last month.


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