Loans secured by properties in economically challenged states are defaulting at an elevated rate and driving commercial mortgage-backed security (CMBS) delinquencies higher, according to the latest U.S. CMBS delinquency index results from Fitch Ratings. The full results are featured in Fitch's weekly U.S. CMBS newsletter.
CMBS late-pays rose 18 basis points (bps) to 8.66% last month, despite a declared end to the recession by the National Bureau of Economic Research.
‘Though certain macroeconomic indicators have been more encouraging of late, CMBS delinquencies will not subside anytime soon,’ says Managing Director Mary MacNeill. ‘National employment underpins demand for every property type, and a jobless recovery for the U.S. economy foretells continued challenges ahead for commercial real estate.’
Currently, 10 states with CMBS loans rated by Fitch have delinquency rates in excess of 10%. Nevada, Hawaii and Michigan are the states with the highest delinquency rates, at 25.85%, 18.03% and 15.66%, respectively.
SOURCE: Fitch Ratings
