CMBS Delinquency Rate Hits All Time High in May

Rate Surpasses the 10% Level as Delinquencies Increase for Third Month

NEW YORK, May 30, 2012 — Trepp, LLC, the leading provider of information, analytics and technology to the CMBS, commercial real estate and banking markets, released its May 2012 U.S. CMBS Delinquency Rate today (full report available Friday, June 1 at http://www.trepp.com/knowledge/research).

The delinquency rate for U.S. commercial real estate loans in CMBS jumped 24 basis points in May to 10.04%. In the
process, the rate broke through the 10% threshold for the first time ever.

Back in December, Trepp predicted that 2012 could be a rocky year for CMBS in terms of the delinquency rate. This
prediction was in anticipation of five-year loans securitized in 2007 beginning to reach their maturity dates. At the time, the delinquency rate was around 9.51%, and it was expected that these maturing loans could lead to a spike of 70 basis points in the short term.

It appears that this prophecy has come true. Up 24 basis points in May alone, the delinquency rate has increased 67
basis points in total since February. Whether the rate finally breaching the double-digit mark will carry some psychological impact remains to be seen.

The good news for the CMBS market is that the five-year loans originated in 2007 were heavily front-loaded. This
means that by the end of this June, the number of these loans reaching their maturity date will start to dwindle.

“While cracking the 10% barrier might weigh on the market’s psyche for a short time, there are likely better days ahead
in terms of delinquencies over the next six months. A big driver of the recent surge in the delinquency rate has come from loans that were originated in 2007 that are coming due now. As we get later in the year, the impact of this trend
will dissipate. The next two or three months could be bumpy, but the second half of the year should bring a leveling off
of the rate,” said Manus Clancy, senior managing director at Trepp.

Currently, $59.1 billion in loans are delinquent. This excludes loans that are past their balloon date but are current in their interest payments. There are $79.2 billion in loans with the special servicer.

The increase in the delinquency rate was driven by weak performance among hotel and industrial loans. Overall, four of the five largest property types saw delinquencies rise. Only the apartment sector improved, and that was by a single
basis point.

For additional details, request the May U.S. CMBS Delinquency Report at http://www.trepp.com. For daily CMBS and bank trading ideas, credit events and commentary, register for TreppWire (http://tinyurl.com/7udftow) or follow us on Twitter (http://twitter.com/TreppWire).

About Trepp, LLC
Trepp, LLC is the leading provider of information, analytics and technology to the CMBS, commercial real estate and banking markets. Trepp provides primary and secondary market participants with the tools and insight they need to
increase their operational efficiencies, information transparency and investment performance. For more information, visit http://www.trepp.com.

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