U.S. commercial real estate loan collateralized debt obligations delinquencies (CREL CDOs) remained in a virtual holding pattern for March, according to the latest index results from Fitch Ratings.
CREL CDO late-pays increased minimally last month to 13.2% from 13.1% in February. Only five new delinquencies were reported in March, totaling $79 million – among them were one term default, one matured balloon, a real estate owned interest and two newly credit impaired securities.
A total of 28 CREL CDOs rated by Fitch Ratings reported delinquencies ranging from 0.3% to 71.7% last month. In total, 47% of rated CREL CDOs were failing at least one overcollateralization test in March, which is up from February as two additional CDOs had test failures.
In March, asset managers reported $20 million in realized principal losses from the disposal of four assets. The largest reported loss was a 92% realized loss on the discounted payoff of a defaulted mezzanine interest on a condominium project located in San Jose, Calif.
Loans secured by land remained the property type with the highest delinquency rate, at 42%. Hotel loans remain as the second highest delinquency rate at 19%, followed by construction loans at 14% and condo loans at 13%.
