Rate Surpasses the 10% Level as Delinquencies Increase for the Third Straight Month
Delinquency Rate is Up 24 Basis Points in May, 67 Basis Points in the Last Three Months
NEW YORK ,NY -- Back in December we predicted that 2012 could be a rocky year for CMBS in terms of the delinquency rate.
At the time, the delinquency rate was hovering at 9.51% and had stayed in a fairly tight band for a number of months.
We wrote that the market could easily see a spike of 70 basis points in the short term, as five-year loans that were securitized in 2007 began to reach their maturity dates.
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That prophecy now appears to be have come true. The CMBS delinquency rate set an all-time high in May.
Overall, the delinquency rate for U.S. commercial real estate loans in CMBS jumped 24 basis points in May to 10.04%. In the process, the rate broke through the 10% threshold for the first time ever.
Whether the rate creeping into double digits for the first time carries some psychological impact remains to be seen.
The good news for the CMBS market is that the five-year loans originated in 2007 were heavily front-loaded. This means that by the end of June, the number of these loans reaching their maturity date starts to dwindle.
As a result, the upward pressure that this has put on the rate should be coming to an end.
For a complete copy of the company’s news release and charts, please contact:
Lindsay Church | Associate Publicist
Great Ink Communications
27 Union Square West, Suite 205 | New York, NY 10003
(212) 741-2977
@GreatinkPR
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