CMBS Loan Delinquency Rate Rises to 8.24%

by: Research Recap

The delinquency rate on loans included in US Commercial Mortgage Backed Securities (CMBS) increased 14 basis points in September to 8.24%, according to Moody’s Investors Service’s Delinquency Tracker (DQT). It was the smallest monthly increase in the national delinquency rate since October 2008, and the fourth consecutive month of modest growth in the rate.

“This easing of the rate of growth in the delinquency rate does not necessarily portend a near term improvement in the market,” said Moody’s Managing Director Nick Levidy.

The number and balance of loans becoming newly delinquent remain high, but in the past few months the number of loans that became current, worked out or disposed has increased.

In September, 311 loans totaling nearly $3.8 billion became newly delinquent, while 238 previously delinquent loans, totaling approximately $3.3 billion, became current, worked out, or disposed. In all, the total number of delinquent loans increased in September to 3,971, and the total balance of delinquent loans increased by approximately $500 million to $52 billion.

By property type, hotels had the greatest increase in delinquency rate for the second month in row, gaining 47 basis points to 15.94%.

At 31 basis points, industrial properties experienced the next highest gain. Industrial properties, however, remain the best performing of the five property types, with a delinquency rate that stands at 6.32%.

Office properties had the third largest increase in its delinquency rate in the past month, with a gain of 29 basis points, bringing the delinquency rate to 6.40%.

In the retail sector, the delinquency rate increased a single basis point to 6.60%.