September saw fewer CMBS delinquencies

Thanks in part to the strength of retail properties, September’s delinquency rate for U.S. commercial real estate loans in commercial-mortgage-backed securities fell for the fourth straight month, to 8.14 percent, according to research firm Trepp. This is off 24 basis points from August and 185 basis points from a year ago. It is the lowest delinquency rate noted by Trepp in three years.

Some $1.7 billion in loans were delinquent in September, a sharp decrease from the $2.5 billion total in August. Delinquent CMBS loans totaled $44 billion for the month, excluding those past their balloon date but current on interest payments, Trepp reports.
This month’s improvement was attributable in part to some $1.9 billion of loans that came out of default in September. Loan resolutions totaled slightly less than $873 million for September, one of the lowest levels in recent months. Resolutions for August came to slightly more than $1 billion.

“The CMBS market managed to shrug off concerns over QE tapering, Syria, and impending government budget issues in September,” said Manus Clancy, a Trepp senior managing director, in a press release. “Supporting the improvement in the rate was a slowdown in new delinquencies and the addition of new deals to the overall loan pool.”

Among the major property types, retail continues to be strongest, while industrial remains the weakest. Office delinquencies improved best month-to-month, easing by 29 basis points, while lodging sustained a 12-basis-point increase.

Source: ICSC Shopping Centers Today, October 4th, 2013
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