Last year marked significant progress when it came to CMBS loans going into delinquency across commercial real estate sectors, according to a recent Trepp report.

At the end of December, the overall delinquency rate came in at 3.11 percent, falling 178 basis points over the prior 12 months and 22 basis points from November. Trepp had predicted that the rate could hit three percent by the end of 2018. Though that didn’t happen, the research firm sees the number of delinquencies continuing to drop during the first half of this year.

The current 3.11 percent is significantly down from an all-time high in delinquencies of 10.34 percent, in July 2012.

On an individual property sector basis, hotels posted the lowest delinquency rate, at 1.51 percent, down from 3.82 percent during the same period a year ago. It was followed by: multifamily, at 1.98 percent, dropping from 2.36 percent; industrial, at 2.39 percent from 5.67 percent; office, at 3.45 percent from 6.4 percent; and retail, at 5.21 percent from 6.13 percent.

Meanwhile, CMBS issuances this year are forecast to slide a bit, according to a National Real Estate Investor article. It quoted Trepp figures saying the new loans will fall five percent to 10 percent for the coming year. The article also said that 2018 CMBS issuances came in at $77 billion, down from $87.8 billion in 2018, citing numbers from Commercial Mortgage Alert. The reasons noted for less issuances were more competition, fewer maturities coming up and a jump in market volatility. As a result, it is starting to take more time to structure deals, and there is more pause in the market, industry observers said.

Looking at property sectors, oversupply in new construction could hurt office and student housing, while potential store closings after the holiday season, which is a common annual event, might negatively impact lending. On a macroeconomic level, the main worry is a coming recession that could hurt  the entire economy.

The reported first major CMBS deal of the year was an $814.4-million refinancing for StorageMart, from Citi Real Estate Funding. Funds will be secured by 101 self-storage facilities in 17 states.