Trepp CMBS Delinquency Rate Delivers Good News of Another Large Decline in May

Trepp, a research provider of securitized mortgage data, posted another large decline in the overall U.S. CMBS delinquency rate during May 2022. Currently, the rate of decline is on pace for the overall delinquency rate to potentially fall below 3% in the coming months — a prospect that seemed unthinkable during the COVID19-pandemic when market volatility caused the delinquency rate to reach 10.32% in June 2020, nearing the all-time high of 10.34% seen in July 2012. The 3.14% delinquency rate in May 2022, which assumes defeased loans are still part of the denominator, represented a decline of 37 basis points from the previous month — the biggest decline since January 2022 as the downward trend continued for 22 consecutive months, with only a brief uptick in late 2021. On a year-over-year comparison, the overall U.S. CMBS delinquency rate is down 302 basis points from the 6.16% rate in May 2021.

Among the major property types, the retail property type had a delinquency rate of 6.57% at the high in May 2022, declining from 10.33% one year ago, in contrast to the 0.38% delinquency rate within the industrial property type at the low for the month. The delinquency rates for the office and residential property types fell 49 basis points and 90 basis points year-over-year to 1.63% and 1.02% respectively; while the lodging property type saw a sharp decline of 839 basis points during the same 12-month period, falling to 5.83% in May 2022.