NEW YORK CITY—CMBS offered its own version ofthe October surprise by posting an unexpected uptick in thedelinquency rate. Trepp LLC saysthe increase of 11 basis points for October was the largest upturnin CMBS late-pays in more than two years, while the currentdelinquency rate of 6.14% is the highest since this past May.

On the other hand, Trepp notes that October's rate is 184 bpslower than the year prior. Year-to-date, delinquencies have fallen129 bps from 7.43% at the end of December 2013. Additionally, Treppsays the the total amount of delinquent loans remained flatmonth-over-month, at $38.1 billion, despite an uptick in newdelinquencies.

“Considering the aggressive rate at which special servicers havebeen burning off loans in distress over the past two years, it wasinevitable that the delinquency rate would start to level off,”says Manus Clancy, senior managing director atTrepp. “We expect more muted gains over the next few months than wegrew accustomed to in '13 and early 2014.”