Fitch: Cumulative CMBS Defaults At 12.4% Through Third Quarter

Cumulative U.S. commercial mortgage-backed securities (CMBS) defaults finished the third quarter at 12.4%, according to Fitch Ratings' weekly CMBS newsletter. Through the first three quarters of the year, defaults are at approximately half of last year's total.

Newly defaulted loans for this year so far total $11.4 billion (795 loans) compared to $22 billion (1,477 loans) for all of last year.

"Though large, high-profile loans are still defaulting, 2011 is on track to have fewer defaults than last year," says Managing Director Mary MacNeill. "Even with limited new issuance, the decline in defaults is signaling some level of commercial real estate stability in most markets this year."

According to Fitch, newly defaulted loans in each quarter were as follows:

  • $4.9 billion in the first quarter;
  • $2.7 billion in the second quarter; and
  • $3.8 billion in the third quarter.

The increase was partially driven by several large specially serviced loans, formally being categorized as current, becoming categorized as in foreclosure, Fitch says. In the first half of the year, there was $1 billion in foreclosure compared to $1.7 billion in the third quarter alone.

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