The Trepp CMBS Delinquency Rate Fell Sharply in November as the Index Hit Another Post-Crisis Low.
Trepp, LLC, a leading provider of information, analytics, and technology to the structured finance, commercial real estate, and banking markets, has released its November 2019 US CMBS Delinquency Report.
The Trepp CMBS Delinquency Rate fell sharply in November, as the index hit another post-crisis low. The November reading is 2.34%, a month-over-month drop of 13 basis points.
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The delinquency rate is down 99 basis points year over year. The delinquency rate started to fall after June 2017 when CMBS delinquencies totaled 5.75%. Since then, the rate has fallen in 25 of the last 29 months. Year-to-date, the rate is lower by 77 basis points. The all-time high of 10.34% was registered in July 2012.
“Although talks of a possible US recession have been surging, worries about the state of the global economy continue to grow, and trade issues are prevailing, the CMBS market has remained remarkably resilient,” said Trepp Senior Managing Director, Manus Clancy. “CMBS issuance continued to march on in November and CMBS delinquencies continued to drop, much like they have since July 2019.”
The largest rate drop among major property sectors in November belonged to the office space, with its delinquency reading dropping 53 basis points to 1.97%. The industrial delinquency rate also fell last month, by 46 basis points, reaching 2.00%. Retail delinquencies rose 16 basis points to 4.36%. The retail delinquency reading continues to be the worst-performing major property type.
The overall CMBS 2.0+ delinquency rate rose five basis points in November to 0.94%, while the percentage of CMBS 2.0+ loans in serious delinquency also rose by six basis points to 0.88% from October. The CMBS 1.0 delinquency rate dropped 199 basis points to 41.67% in November and the percentage of CMBS 1.0 debt that is seriously delinquent is also 41.67% (there are no legacy loans exactly 30 days delinquent), a drop of 121 basis points month over month.
