CMBS delinquencies are continuing to trend lower, down to 8.92%, according to Trepp’s CMBS Delinquency Report for September 2020.
Though September marks the third consecutive month that CMBS delinquencies declined, Trepp noted that some of the loans identified as current have come as a result of forbearances granted and borrowers being authorized to use reserves to bring debt service payments up to date.
(For those who need a refresher, a forbearance is when your mortgage servicer or lender allows a borrower to temporarily pay his mortgage at a lower payment or pause paying the mortgage. The borrower must pay the payment reduction or the paused payments back later.)
Trepp’s recent analysis of CMBS servicer data found that about 800 loans have been granted some sort of forbearance. The loans total $31.2 billion. This number is nearly double the reported forbearances in July: $16.6 billion across 400 loans.
About 64% of the forbearances granted thus far are for hotel loans, while roughly 28% of the forbearances are retail loans, according to Trepp. Another 5% of the forbearances are backed by mixed-use collateral (which often include office or multifamily with street-level retail space).
“There was only a small smattering of industrial, multifamily, or office loans on the list,” Trepp noted.
By loan size, there are over 50 loans with a balance of $100 million or more that were granted relief. Another 500 loans from the forbearance list have balances of $25 million or less.
The loans Trepp reviewed were private-label conduit and SASB deals. The firm excluded agency deals and one-off transactions like mezz deals or cell towers, among others.
Trepp predicated that the number of loans in forbearance will likely grow since its analysis found hundreds, if not thousands, of loans for which “forbearance request is under review.”
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