CMBS Delinquencies Rise, but Pace of Growth Abates

Delinquencies on CMBS loans continued their upward climb in recent months, according to the most recent reports from Trepp LLC and Realpoint LLC, two research firms that track the sector. But the signs continue to indicate that the CMBS market may be near its bottom.

In July, the delinquent unpaid balance for CMBS rose $387.9 million, up to $60.84 billion from $60.45 billion a month prior, according to Horsham, Pa.-based Realpoint.

The increase was dramatically smaller than the average for the first six months of 2010 when delinquencies grew by an average of $3.14 billion per month.

Overall, the delinquent unpaid balance is up 137 percent from a year ago and is now more than 27 times the low point of $2.21 billion in March 2007. The distressed 90+-day, foreclosure and REO categories grew in aggregate for the 31st straight month—up by $4.05 billion from the previous month.

The total unpaid balance for CMBS pools reviewed by Realpoint for the July remittance was $780.97 billion down from $784.06 billion in June.

The delinquency ratio for July of 7.79 percent (up from the 7.70 percent reported for June) is more than two times the 3.14 percent reported in July 2009 and more than 27 times the Realpoint recorded low point of 0.28 percent in June 2007.

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