Moody’s: CMBS Delinquency Rates Continue To Rise

Moody's: CMBS Delinquency Rates Continue To Rise The delinquency rate on loans included in U.S. commercial mortgage-backed securities (CMBS) conduit and fusion transactions increased by 5 basis points (bps) in December to 9.32%, according to Moody's Investors Service's Delinquency Tracker (DQT). The rate of loans in special servicing, as measured by Moody's Specially Serviced Loan Tracker, declined by 13 bps in December, to 11.97%.

December was the 12th consecutive month that delinquencies in the U.S. have been above 9%, according to Moody's. New delinquencies in December slightly exceeded the resolutions of delinquent loans. Specifically, in December, there were $3.7 billion of newly delinquent loans, while $3.5 billion in loans were resolved or worked out.

The $5.5 billion of seasoned loan dispositions and payoffs more than offset the $1.4 billion of new CMBS conduit deals in December, resulting in a net decline of the CMBS universe in the U.S. to $582.8 billion. Bank of America Plaza in Atlanta, with an outstanding balance of $363 million, was the largest newly delinquent loan in December and also became the seventh largest delinquent loan overall.

By property type, the hotel and multifamily sectors were the only two to see declines in their delinquency rates in December. The hotel sector recorded the greatest decline, a 58 bps drop to 12.96%, while multifamily posted a 43-point drop to 14.44%, still the highest rate among the core asset classes.

Office and retail, the largest sectors by share of total CMBS outstanding, both recorded increased delinquency rates in December. Office delinquencies increased by 26 bps to 8.65%, while retail delinquencies increased by 25 bps to 7.22%. The industrial sector recorded the largest increase in delinquency rate in December, rising 59 bps to 12.09%, the highest delinquency rate reported for the sector to date.

By state, Nevada continues to have the highest delinquency rate, at around 20%.


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