99.62% of the California commercial real estate loans surveyed by the California Mortgage Bankers Association (CMBA) were current or one payment behind during the second quarter of 2011. The report recorded a 0.38% delinquency rate, down from 1.26% one year earlier.
Of the 16 companies that participated in the survey, nine reported zero delinquent loans.
first tuesday take: Contrary to the implication given in the report by the Sacramento Bee, the CMBA survey does not reflect the delinquency rate of California commercial real estate loans. The survey merely analyzed information given by 16 participating companies, which alluded to a broad commercial loan delinquency trend in California.
The CMBA report fails to include bank portfolios where most of this type of paper is placed.
The Federal Reserve Board of San Francisco (FRBSF) reports a 7.05% delinquency rate on California commercial real estate loans held by banks (excluding farmland) for the second quarter of 2011 ― continuing a downward trend from 7.46% the prior quarter and 8.75% one year earlier. [See the FRBSF Economic Data page on Delinquencies and Delinquency Rates.]
While this data happily reflects a trendline improvement in commercial loan delinquency, the FRBSF’s data sheds light on the more accurate perspective needed by commercial brokers and leasing agents. Much like the attitude of commercial investors and developers surveyed by the Allen Matkins/UCLA Anderson Forecast, the CMBA is too eager to be optimistic. [For more information regarding the California Commercial Real Estate Survey, see the July 2011 first tuesday article, Just think positive and be happy?]
Re: “Commercial real estate delinquency drops” from the Sacramento Bee
“California Commercial Loan Delinquency Rate Drops by Half to 0.38%” from the CMBA