CHARLOTTESVILLE, VA—It's official. The commercial real estate lending market has returned to health, or at least is on the cusp of doing so, according to two separate reports, one by SNL Financial, the other by Chandan Economics. Both note that loan delinquencies are reaching post-crisis lows and that lending is increasing at a healthy clip.

SNL reports that US commercial banks saw a 14-quarter low delinquency rate of 5.28% on commercial real estate loans as of the end of June, and the ratio of bad CRE loans has more than halved from the peak of 10.76% nine quarters ago. A number of banks, many based in California, have a clean bill of health now in terms of faulty CRE loans.

Chandan echoes these findings, noting the second quarter saw "the largest onequarter drop in the bank CRE and multifamily default rate so far into the recovery." The default rate across commercial real estate and apartment loans held by banks fell to 3.11% in Q2—the lowest in three years.

Similarly, the Mortgage Bankers Association has weighed in with its own statistics showing the drop in delinquencies for most loans in Q2. However, the 30-dayplus delinquency for loans held in CMBS increased 0.12 percentage points to 8.97%.

There are several reasons for the discrepancy between bank-loan and CMBS delinquencies, says Jamie Woodwell, MBA's VP of commercial real estate research. Starting with the obvious, the loans made by banks and CMBS lenders are very different.

"When the CMBS market was extremely active from 2005 to 2007, that was when property prices were at their peaks," Woodwell says. "So loans made in that period have some different underlying features than loans made over other periods of time."

While acknowledging that CMBS lagged non-securitized debt in terms of declining delinquencies, Trepp's Manus Clancy says the August numbers marked the beginning of a trend. In the steepest monthly decline since November of 2011, the CMBS delinquency rate fell 21 basis points in August after rising for five consecutive months.

"Our expectation is that it will be flat to trending lower for the foreseeable future," says Clancy, who is senior managing director. "The big problem for the past six months has been loans that were originated in 2007 reaching their maturity date. We're now kind of past that period of maturity defaults, and we get a reprieve for a couple of years."