Mortgage records indicate that a rising number of commercial real estate borrowers who took out loans in 2007 are defaulting now that it's time to pay up.
According to a recent report from Trepp, the delinquency rate for commercial borrowers surged 31 basis points to 9.68 percent. This share totaled an estimated $58.1 billion.
"We predicted late last year that the delinquency rate would rise largely on the impact of 2007 loans coming due, and today's report underscores that forecast," said Trepp senior managing director Manus Clancy.
Meanwhile, the company found that the number of newly delinquent loans rose 91 basis points in March to a rough total of $5 billion. In addition, the delinquency rate on commercial office real estate spiked 37 basis points to an all-time high of 9.41 percent.
Leading up to March, there were significant drops in the commercial delinquency rate in both January and February. Despite the forecast of an upswing in activity, a number of industry experts from Trepp hoped enough momentum was gained to prove their predictions wrong.