DBRS Morningstar CMBS Monthly Highlights—July Remittance: Delinquency Rate Resumes Its Decline; Underperforming Malls Continue to Weigh on Maturity Payoff Rate
The commercial mortgage-backed securities (CMBS) delinquency rate resumed its two-year decline, hitting a post-pandemic low of 3.04%, down 13 basis points (bps) from June. The rate was driven lower by hotel loans, which saw a 59-bp decline from June. Meanwhile, the special servicing rate continues to improve, recording its 22nd consecutive monthly decline to 4.78%, dropping 21 bps from June and down 3.24 percentage points from July 2021, and liquidation volume remained below $300 million for the fifth time in the past seven months as more loans were modified and returned to master servicing than disposed. Lastly, the maturity payoff rate held in the mid-60% range for the second straight month. We don't expect much movement through year-end in the year-to-date maturity payoff rate, which stands at 64.8%, as a slug of mall-backed loans will likely have trouble obtaining takeout financing.
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