The delinquent unpaid balance for commercial mortgage-backed securities (CMBS) jumped in November to $37.93 billion from $32.55 billion a month earlier, rating agency Realpoint reports. The increase was largely driven by the newly delinquent status of a $3.5 billion portion of a $4.1 billion Extended Stay Hotel loan.
Realpoint tracked increases in each of the five delinquent loan categories – 30-day, 60-day, 90+ day, foreclosure and real estate owned (REO). The 90+ day, foreclosure and REO categories grew in aggregate for the 24th straight month, increasing $1.47 billion over October's numbers.
The firm projects the delinquent unpaid CMBS balance to grow to between $50 billion and $60 billion by midyear. The delinquency percentage, which totaled 4.71% at the end of November, is projected to grow to between 5% and 6% through the first quarter, the firm adds. Under heavily stressed scenarios, the delinquency percentage could surpass 8% by midyear.
‘This outlook is mostly due to the reporting of several large loans from recent-vintage transactions that continue to show signs of stress and default, along with continued balloon maturity defaults from more seasoned transactions,’ Realpoint's monthly delinquency report says. ‘In addition, while we maintain our negative outlook for both the retail and hotel sectors for the remainder of 2009 and into 2010, we are closely monitoring the negative trends surrounding several large, struggling, multifamily loans that have near-term default risk.’
New CMBS issuance may help offset the growth in delinquency, Realpoint adds.