US CMBS Delinquency Rate Slides Lower in August

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“While geopolitical events, trade negotiations, and the upcoming midterm elections have provided investors with plenty of drama, the CMBS market continues to be largely drama-free.”

Trepp, LLC, a leading provider of information, analytics, and technology to the structured finance, commercial real estate, and banking markets, has released its August 2018 US CMBS Delinquency Report. The full report can be found here: https://info.trepp.com/august-2018-cmbs-delinquency-report-pr.

The Trepp CMBS Delinquency Rate decreased again in August, marking the sixth consecutive month in which the reading has dropped. The rate fell 17 basis points to 3.64% last month, which is a new post-crisis low. As the remaining legacy debt continues to be resolved and more new loans are issued into the pipeline, the reading can be expected to maintain its downward trajectory.

“While geopolitical events, trade negotiations, and the upcoming midterm elections have provided investors with plenty of drama, the CMBS market continues to be largely drama-free,” said Trepp Senior Managing Director, Manus Clancy. “Thanks to continued delinquency rate improvements and a solid pace of new issuance, the CMBS market in 2018 remains healthy and volatility-free for issuers and investors.

Lodging loans took over the rank of best performing major property type in July as its rate ended the month lower than that of the multifamily sector. However, multifamily loans reclaimed the title in August thanks to a 28-basis-point drop for a reading of 2.07%. The lodging delinquency rate slid three basis points lower to 2.22% last month. Readings for all five major property types decreased in August.

The CMBS 2.0+ delinquency rate increased again in August as it climbed seven basis points to 0.59%. Delinquencies in CMBS 1.0 rose 39 basis points to 46.79% last month. By property type, the largest movement in CMBS 2.0+ was observed in the retail sector as that rate jumped 44 basis points to 0.84% in August. The main reason for the increase was due to a $489 million loan backed by 123 Toys “R” Us properties turning 30 days delinquent.

For additional details, such as historical comparisons and analysis on potential future rate moves, download the August 2018 US CMBS Delinquency Report: https://info.trepp.com/august-2018-cmbs-delinquency-report-pr. For daily CMBS commentary, follow @TreppWire on Twitter.

About Trepp

Trepp, LLC, founded in 1979, is the leading provider of information, analytics and technology to the CMBS, commercial real estate and banking markets. Trepp provides primary and secondary market participants with the web-based tools and insight they need to increase their operational efficiencies, information transparency and investment performance. From its offices in New York, San Francisco and London, Trepp serves its clients with products and services to support trading, research, risk management, surveillance and portfolio management. Trepp is wholly-owned by Daily Mail and General Trust (DMGT). For more information, visit http://www.Trepp.com.

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