Weekly Wrap: CMBS delinquencies ticked up in October
Fitch Ratings on Friday reported the U.S. CMBS delinquency rate reversed course in October, rising 21 to basis points to 4.85% after two consecutive months of declines.
New delinquencies for outstanding commercial mortgage-backed securities deals tracked by Fitch totaled $3.2 billion, up from $2 billiion in September, according to the report.
"Of the new delinquencies, nearly 70% ($2.2 billion) were first time additions to Fitch's delinquency index since the start of the pandemic with 13% ($403 million) previously been granted debt relief," Fitch's report stated.
About $1.5 billion of the newly delinquent loans were in the retail space, including $1 billion for 12 loans secured by regional malls that were already suffering from falling sales and traffic before the COVID-19 pandemic.
About 44% of the 30-day delinquencies in September rolled into 60-day late obligations in October, as the roll rate increased from the prior two months (30% from August to September, 32% from July to August).
Despite the rising rate, the delinquency rate remains "well below" Fitch's projection of between 8.25% and 8.75% by year's end, the report stated. "This is due to both the continued issuance volume during the pandemic and fewer actual defaults than anticipated, aided by government stimulus and debt relief granted by servicers and Freddie Mac."