CMBS Delinquencies Decline On Large-Loan Resolutions

For the first time in 33 months, U.S. commercial mortgage-backed security (CMBS) loan delinquencies declined, with a large assist from hotels, according to the latest loan delinquency index result from Fitch Ratings.

CMBS delinquencies dropped 88 basis points (bps) to 7.78%, due largely to the resolution of seven loans greater than $100 million each, including the $4.1 billion Extended Stay America loan. At the same time, hotel delinquencies declined to 14.14% from 21.31% – the largest drop ever recorded of any CMBS asset type by Fitch.

‘Whereas hotel-backed loans saw the most rapid performance deterioration, now the opposite is true,’ says Managing Director Mary MacNeill. ‘Hotel loans are now the most well-positioned to recover quickly when business and consumer spending resume and the economic recovery gains traction.’

Fitch measures the current delinquency rates by property type as follows:

  • Multifamily: 14.57%;
  • Hotel: 14.14%;
  • Retail: 6.25%;
  • Industrial: 5.83%; and
  • Office: 5.38%.

SOURCE: Fitch Ratings


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