Trepp Delinquency Report June 2022

Trepp Delinquency Report June 2022

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Source: CMBS Research

Trepp CMBS Delinquency Rate Rises for Only Second Time in Two Years in June 2022 – Blip or Inflection Point?

The Trepp CMBS delinquency rate posted a rare uptick in June 2022. The rate moved up just six basis points, and only time will tell if this is just a blip, or an inflection point triggered by higher borrowing costs for commercial real estate and weakening fundamentals for the US economy. This uptick is only the second increase in the rate over the last 24 months. The last increase in the rate came in late 2021. The Trepp CMBS Delinquency Rate in June was 3.20%, an increase of six basis points in May. All major property types saw small increases in their respective delinquency rates in June.

The percentage of loans in the 30 days delinquent bucket is now 0.18% – up five basis points for the month. Last month, the Trepp team asked rhetorically if market volatility, inflation, and interest rates over the last three months would cause a slowing of the rate of improvement in CMBS delinquency levels. One month’s data is too small a data point to call the increase in the rate this month a trend, but the direction of the delinquency number over the next few months will give a sense of the impact of recent events on the overall CMBS market. Our numbers above reflect percentages that assume defeased loans are still part of the denominator.... [click the document to view more]