U.S. commercial mortgage-backed securities (CMBS) delinquencies declined for the fifth straight month in October, according to the latest index results from Fitch Ratings.
CMBS late-pays fell eight basis points (bps) last month to 8.29% from 8.37% in September. Delinquency rates for all major property types except multifamily improved in October. Fitch Ratings attributes the multifamily rate's woes to problems connected to the $375 million loan on a luxury apartment building on Manhattan's Upper West Side. The loan contributed 58 bps to the multifamily delinquency rate, and if not for the loan becoming delinquent again, the multifamily rate would have improved by 8 bps.
Fitch Ratings adds that hotel late-pays also continued their dramatic improvement, falling another 66 bps in October to their lowest level since December 2009. Meanwhile, industrial, retail and office properties saw improvements of 27 bps, 13 bps and 11 bps, respectively.
In October, resolutions of $1.4 billion outpaced additions to the index of $1.3 billion. In addition, $4.6 billion in Fitch-rated deals closed in October, more than offsetting $3.4 billion in portfolio runoff. The net effect bolstered the improvement in the rate.