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CMBS Delinquency Rate Falls Below 3.00 Percent in February

The rate of 30+ day CMBS delinquencies continued its months-long downward trend in January.

The 30+ day CMBS delinquency rate fell below 3.00 percent in February, as market observers previously predicted. Research firm Trepp reports that the delinquency rate for all property types fell 15 basis points month-over-month to 2.87 percent. The figure was 164 percent lower than the 30+ day CMBS delinquency rate recorded in February 2018.

In addition, Fitch Ratings found that delinquencies on CMBS 1.0 loans declined to 2.0 percent last month, from 2.05 percent in January. The figured markets a post-crisis low, according to Fitch researchers.

However, Trepp reports that while the office, retail and hotel sectors all registered declines in delinquency levels, delinquency rates rose in the industrial and multifamily sectors. Multifamily experienced the most significant month-over-month increase at 34 basis points, to 2.31 percent. Industrial delinquencies went up by 12 basis points, to 2.17 percent.

Meanwhile, the office sector saw the biggest drop in CMBS delinquencies, by 34 basis points, to 3.47 percent. Retail delinquencies went down by 15 basis points to 4.77 percent—still the highest level of any core property types.

The delinquency trends tracked across the main property sectors by Fitch appeared more consistent. The delinquency rates in the office and industrial sectors remained flat month-over-month, at 2.59 percent and 0.98 percent respectively. CMBS delinquency in the multifamily space fell by just 1 basis point, to 0.49 percent. The delinquency rate in the hotel sector went up by 6 basis points, to 1.64 percent. And retail experienced the most significant drop in CMBS delinquency, at 10 basis points, ending the month at 4.69 percent.

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