NEW YORK CITY-A pool of troublesome loans originated at the height of the downturn is still wreaking havoc on the recovery of the CMBS market, pushing delinquency rates and losses higher. According to data from Trepp LLC’s March 2012 US Delinquency Report, over $9 billion worth of loans originated in 2007 came due in the first months of 2012, but only 48% were paid off at or prior to their maturity date.

Of the remaining 52% of loans that remain outstanding from the class of 2007, 49% are currently listed as non-performing balloon loans, and the properties of another 23% have already been foreclosed upon or the special servicer is pursuing a strategy of foreclosure.

Describing phenomenon as "CMBS purgatory," Manus Clancy, a senior managing director at Trepp, tells GlobeSt.com that much needs to be done to relieve the pressure in the market.

“The special servicers are going to remain busy for the foreseeable future,” he says. “There’s a lot of wood to cut, and we will continue to see a combination of bifurcations, extensions, rate relief and in some cases, foreclosures and seizing of properties. I think it’ll be a very mixed bag across that spectrum.”

Across the board, the delinquency rate for US commercial real estate loans in CMBS rose to 9.68% in March, an increase of 31 basis points – the largest monthly increase since the beginning of 2011, says Trepp. The value of the delinquent loans is now $58.1 billion.

Newly delinquent loans—over $5 billion total—put 91 basis points of upward pressure on the rate. Out of the major property sectors, multifamily and office loans were the worst performing property types, with delinquency rates hitting 15.39% and 9.41%, respectively.

One category to keep an eye on, Trepp says, is that of loans that are past their balloon date but are current in their interest rate. The category now accounts for 1.17% of loans in the database, though down slightly from 120 basis points last month.