Slight dip in CMBS delinquencies a temporary blip: Barclays

Barclays Capital reported a slight decrease in commercial mortgage-backed securities delinquencies in May, but said the improvement is likely temporary and not a new trend. According to Barclays, 30-day delinquencies in the CMBS space dropped to 9.8% in May from 9.9% in April. The research firm said this is the first decline in CMBS delinquencies witnessed since mid-2009. But optimism concerning this figure is short lived. “We view this as a temporary correction rather than as the formation of the new trend,” Barclays said in a report. “One month of negative change in delinquencies is more likely to demonstrate the volatility of this indicator rather than the reversal of the longer term trend.” Trepp analytics firm said Wednesday the decrease in CMBS delinquencies signified improvement in the secondary market, which is “leveling off.” Barclays found an uptick in 60-day delinquencies in May, up about 10 basis points from the previous month to 9%. Hotels and lodging properties had the highest percentage of loans in this delinquency slice at 16.2%, followed by the multifamily sector (15.6%), the industrial sector (10.7%), the retail sector (7%) and the office sector (6%). These delinquency trends by sector hold true for 30-day delinquencies as well. Barclays said about 35% of maturing loans in the CMBS marketplace were outstanding three months after their respective maturity dates. CMBS in force decreased to $5.4 billion in May, as “result of the combined effect of liquidations, payoffs and amortization.” Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR.