CMBS Late-Pays Reach 14-Month High

Trepp headquarters in New York City; the firm reports December late-pay increases in some sectors and decreases in others.

NEW YORK CITY—Erasing all of the gains registered in early 2016, the CMBS delinquency rate climbed 20 basis points last month to 5.23%, the highest level since October 2015, according to Trepp LLC. The late-pay rate has now moved higher in nine of the past 10 months.

“With a cascade of loans from the 2007 vintage coming due in 2017, it is hard to see the rate going down any time in the near future,” according to Trepp. “Many of the stronger performing loans from 2006 and ‘07 were either defeased prior to maturity or paid off during their open period. Those that make it to their maturity date tend to be loans with more middling debt service coverage or uncertainty in their rent rolls.”