Today’s post is written by Michael Green, Senior Commercial Loan Originator with Counsel Mortgage Group, LLC. Mike writes monthly on the commercial mortgage market. Check back each month to check his commentary.

Trepp (CRE research & analytics) released their CMBS Delinquency rate for March, showing it dipped slightly for the month, led by a significant improvement in the retail CMBS delinquency rate (and, notably, a 5 bp (basis point) uptick in the office delinquency rate). The overall delinquency rate declined 4 bps to 4.67%, with retail delinquency posting a huge 47 bp drop to 5.56%.

Per Thomas Taylor at Trepp:

“This comes even as the outstanding balance of retail loans has remained relatively flat, indicating resilience in issuance amid softening performance.”

“Retail remains the second-worst performing asset by delinquency and special servicing rate, outpaced only by office in both categories, while the sector boasts the lowest watchlist rate, … retail’s distress metrics continue to improve monthly.”

Trepp reported that 19.6% of retail loans were on watchlists last month. That compares with 24.9% of all loans on the watchlists, a 199 bp increase from the previous month.

Regional malls are leading the way in delinquency and special servicing, while those backed by super-regional, neighborhood and community shopping centers are doing well.