A surge of new late-pays, coupled with below-average loan resolutions, pushed the U.S. commercial mortgage-backed securities (CMBS) delinquency rate to a new high of 9.01%, Fitch Ratings says.
Nearly $3 billion of loans became delinquent in July, outpacing the $1.4 billion of resolutions from Fitch's index. July's CMBS delinquency rate is 37 basis points (bps) higher than it was in June, and it tops the previous high of 8.81%, which occurred in May.
‘A change in the foreclosure status of several larger specially serviced loans, coupled with slower resolution activity, led to the spike in CMBS delinquencies,’ says Managing Director Mary MacNeill. ‘Despite the 37-bp uptick, delinquencies are still trending within Fitch's projection of 10 percent by year's end.’
Loan resolutions had been averaging about $2.3 billion per month over the past year, Fitch explains. Further, the volume of new delinquencies was 24% higher than average.
Meanwhile, Fitch's rated portfolio continued to shrink, falling more than $100 billion, or 20%, from its June 2008 peak. The contraction accounts for roughly 180 bps of the current delinquency rate, Fitch says.
Multifamily continues to be the worst-performing property sector, with a delinquency rate of 15.92% in July. All five of the major property types tracked by Fitch experienced increased delinquency rates.
