Commercial loan delinquencies rise slightly in March
Apr 10, 2012 Walt Wojciechowski
The delinquency rate on commercial real estate loans increased last month to reach 9.68 percent, according to the latest U.S. CMBS Delinquency Report from research firm Trepp. The total value of delinquent commercial loans now stands at $58.1 billion. Loans on multifamily and office properties experienced the poorest performance last month, with the latter setting a new all-time high of 9.41 percent. The total value for both categories was $5 billion. The delinquency rate for hotel loans was the only major property type to improve. "We predicted late last year that the delinquency rate would rise largely on the impact of 2007 loans coming due, and today's report underscores that forecast," said Manus Clancy, senior managing director at Trepp. "After the rate fell nicely in January and February, we were cautiously hopeful that we'd be wrong." The latest report shows the market has significant room for improvement, Clancy added, noting that a rate north of 10 percent should not be ruled out. Consumer credit has been rising steadily in recent years, especially on student loan debt, prompting many borrowers to seek alternative credit sources.