The surge in CMBS delinquencies that most industry watchers were anticipating came through in May – but the size of the jump surprised to the downside. In April 2020, Trepp’s CMBS Delinquency Rate registered at 2.29%. About 8% of loans by balance missed their April loan payments as we noted in last month’s delinquency report. If all those loans became 30 days delinquent this month, the rate would have topped 10% which would have threatened the all-time high recorded in 2012.
Many of the loans that were in the “grace” or “beyond grace” period either stayed in that category or reverted to “current,” keeping the jump in the delinquency rate from being worse.
The Trepp CMBS Delinquency Rate in May logged its largest increase since we started tracking this metric in 2009. The May reading is 7.15%, a jump of 481 basis points over the April number. Almost 5% of that number is represented by loans in the 30-day delinquent bucket. Given that about 8% of loans had missed payments for the April remittance cycle, the fact that delinquencies went up less than 5% has to be viewed as a small “win.”
The numbers could head higher in June considering that about 7.6% of loans by balance missed the May payment but remained less than 30 days delinquent. (As more forbearances receive approval, some delinquent loans could revert to current status based on expectations of how loan statuses will be reported in servicer data going forward, if reported correctly. For instance, if a loan’s last payment was made in March, it would not show up as 60 days delinquent in June if a forbearance had been granted.)
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