The delinquency rate for securitized commercial mortgages has dropped for three months in a row, reaching its lowest level of the year in October, according to Fitch, but increased 21 basis points (bp) to 9.77%, according to Trepp. The percentage of CMBS loans that are at least 60 days past due hit 8.56% on October 31, down 4 bp from a month earlier, according to Fitch. The CMBS delinquency rate is now at its second-highest level ever, according to Trepp. Only the 9.88% reading in July 2011 was higher.
The difference in delinquency between Trepp and Fitch is due to Fitch reporting loans 60 days past due as delinquent, while Trepp reports loans 30-plus days past due in its statistics.
According to Fitch, last month’s batch of 139 newly delinquent mortgages had an average balance of only $11 million, with just one exceeding $100 million. “The new delinquencies consisted largely of smaller loans defaulting at maturity, which may be indicative of a developing positive trend,” said Fitch Managing Director Mary MacNeill. She noted that such loans generally get resolved at a much faster pace than mortgages that fall into arrears during their terms.
Trepp reported the following delinquency by property type:
| % 30+ Days Delinquent (Property Type) |
|---|
| Oct-11 | Sept-11 | Aug-11 | 3 Mo. | 6 Mo. | 1 Yr. | |
|---|---|---|---|---|---|---|
| Industrial | 11.59 | 11.38 | 11.24 | 11.09 | 10.76 | 6.27 |
| Lodging | 14.12 | 13.30 | 13.76 | 15.04 | 15.45 | 14.92 |
| Multifamily | 16.73 | 16.96 | 16.44 | 16.94 | 16.77 | 14.63 |
| Office | 8.95 | 8.29 | 8.17 | 8.17 | 7.20 | 6.68 |
| Retail | 7.61 | 7.62 | 7.38 | 7.85 | 8.15 | 7.17 |
- Hotel delinquency rate up 82 bp – now 14.12%;.
- Office delinquency rate up 66 bp to 8.95%;
- Industrial delinquency rate jumps 21 bp to 11.59%;
- Multifamily delinquency rate down 23 bp, remaining the worst major property type with a rate of 16.73%; and
- Retail delinquency rate that is virtually unchanged — down 1 bp — still the best performing major property type.
