While more than $5 billion of loans within commercial mortgage-backed securities (CMBS) became delinquent in January, the increase was largely offset by more than $3 billion in loans cured during the same period.

The volume of resolved loans helped push the delinquency rate for CMBS loans down six basis points in January to 9.52 percent, according to a new report from New York-based analytics firm Trepp. A loan is considered delinquent if it is 30 days or more past due.

“The CMBS market performance will be dictated by two trends going forward,” said Manus Clancy, senior managing director at Trepp, in a statement. “The pace of loan liquidations will compete against the growth of delinquent loans that emerge from the Class of 2007. If the rate of loan liquidations slows, the rate will climb. If the special servicers keep plowing ahead at the pace they did in January, the rate could manage to stay flat.”

The first wave of loans originated in 2007 that reached their balloon dates in January performed poorly, with only 27 percent of these loans managing to pay off. While this should have pushed the delinquency rate much higher, this upward pressure was offset by the $1.6 billion in loans that were resolved with losses.

DELINQUENCY BY SECTOR
The multifamily delinquency rate fell 18 basis points in January, but remains the worst performing property type at 15.39 percent (see chart). The industrial delinquency rate rose 11 basis points to 12.14 percent in January, replacing hotel loans as the second worst performing category.

Lodging delinquencies finished the month down 11 basis points at 12.09 percent, while the office delinquency rate dropped seven basis points to 8.9 percent. The retail delinquency rate increased three basis points to 7.88 percent, remaining the best performing property type.

For the last three months, the overall U.S. delinquency rate has ranged between 9.5 and 9.6 percent. Similarly, over the last 12 months, the rate has remained within a range of just over 50 basis points. During this stretch, the highest level was 9.88 percent in July, while the lowest was 9.37 percent in June 2011.

--Liz Burlingame