Woodwell noted that the August performance is still property-type dependent.

“The properties that saw the most immediate and dramatic impacts from the pandemic – lodging and retail – are still experiencing considerably more stress than others but showing improvement. Delinquency rates are down significantly for those property types and remain muted for others,” he said.

Delinquencies for loans backed by lodging and retail properties fell from 16.5% to 13.4% month over month. The delinquency rates of other property types were also at lower levels in August. Retail loan delinquencies were down five basis points to 8.5%, industrial properties dropped three basis points to 1.5%, office property loans decreased 12 basis points to 2%, and non-current multifamily loans dipped three basis points to 1.2%.

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“There should be continued downward pressure on delinquency rates as more later-stage delinquencies are worked through. What happens with early-stage delinquencies will largely be a function of the broader economy,” Woodwell said.