CMBS delinquencies decline in October

A decline in the overall commercial mortgage-backed securities rate was recorded at the start of the fourth quarter.

A decline in the overall commercial mortgage-backed securities rate was recorded at the start of the fourth quarter, according to a report from Trepp.

Overall, the rate of delinquencies for CMBS was 9.69 percent, which was 30 basis points lower than September's figure. Additionally, it was the third consecutive month where the level dropped, the report explained. This was the most significant decline in more than a year.

Heightened resolutions helped the rate decline last month, according to Trepp. More than $1.5 billion in loans were taken off the books with losses. There was also only $2.6 billion in new delinquencies during the month, which was significantly lower than the previous figure of $3.3 billion.

"[T]he CMBS market enjoyed another terrific month," said Manus Clancy, senior managing director for Trepp. "Spreads dropped once again, making refinancing possible for previously marginal performing properties while the delinquency rate continued to march lower. Overall, there was a lot to cheer about for CMBS investors."

The report added that the delinquency declines could continue for the foreseeable future, especially as more loans are resolved and borrowing expenses stay at low levels.

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