According to a report by Trepp, significant changes in credit were seen in newly delinquent loans, cured loans and modified loans during the month of July. This was largely driven by large-scale loans. For instance, the delinquency rate for office CMBS increased by 54 basis points to 8.09% last month, with one loan alone (the $670-million securitization on 230 Park Ave.) accounting for about one-third of new delinquencies.
In the multifamily sector as well, several large loans became delinquent or reverted back to being nonperforming in July. One example is the $221-million MFP portfolio which first became nonperforming last November but then returned to performing status in April before flipping back again last month. As a result of these changes, multifamily delinquencies rose by 27 basis points to reach 2.63% at the end of July.
On a positive note though, there were also instances where previously troubled loans turned around and improved their performance status during this time period. For instance,the $124 million Gansevoort Park Avenue loan backed by a Manhattan lodging property was sent to special servicer due an imminent monetary default but then managed turn things around and become performing once again after its matured balloon payment was made in full during July.This helped bring down hotel delinquencies significantly from June’s levels – dropping them downby15 basis points from6 .17 %to6 .14 %. Similarly,in retail sector too,delinquency rates saw improvement as they declinedby28basispointsfromJune’slevels,reachinga totalof6 .14%.
