Hotel, retail properties push late loan payments to highest month-over-month increase since 2009.
Commercial mortgage-backed securities’ (CMBS) delinquencies rose last month by the highest month-over-month amount since 2009 stemming from the coronavirus pandemic, according to a real estate research firm that tracks the debt.
Trepp, in a podcast earlier this month, notes that one-fifth of CBMS loans collateralized by hotels were 30 days or more behind in payments. If debt that had either been assigned to a “watch list” or a special servicer for monitoring were included, the percentage would rise to 50%.
About 10% of all CMBS retail center loans, meanwhile, were at least 30 days in arrears in May, Trepp notes.
In all, slightly more than 7.15% of all CMBS loans were delinquent at the end of last month, but a Trepp analyst notes that the majority of those late payments were only 30 days behind. If the U.S. economy were to continue recovering, many of those borrowers would likely either be able to arrange for forbearance from lenders or would be able to catch up on payment obligations.
CMBS account for roughly 25% of all commercial real estate debt nationwide, and such securities have been used to finance a number of high-profile office and retail projects throughout the Gulf Coast.