The 60+ day delinquency rate for loans in commercial mortgage-backed securities (CMBS) continues to rise, constituting about 8.3% of the CMBS conduit universe, according to the latest September remittance data analyzed by Barclays Capital. According to a report from analysts Julia Tcherkassova and Keerthi Raghavan, most property types saw an increase in 60+ day delinquencies, with the lone exception being loans backed by industrial properties.
Liquidation volumes appear to have dropped last month, the analysts say. For the past two months, liquidations had been higher than $1 billion, which Tcherkassova and Raghavan explain was caused by note-sale activity. Liquidations fell to $516 million in August, which is still higher than the average volumes seen in 2009.
‘We expect similar spikes in liquidations in the future as and when special servicers release blocks of distressed loans for note sales,’ the analysts write. ‘We also view the more than $500 [million] liquidation volume as very substantial; if this pace proves sustainable through the end of the year, it might have implications for the outstanding balances of some short-life tranches.’
SOURCE: Barclays Capital