CMBS delinquencies in the U.S. have reached a new record high as a result of a slew of new late-pays along with below-average loan resolutions last month, Fitch Ratings analysts said.
Close to $3 billion of new delinquencies in July outpaced the $1.4 billion of resolutions from the index. This led to a 37-basis point increase to 9.01% ― surpassing the previous high water mark of 8.81% recorded in May 2011.
"A change in the foreclosure status of several larger specially serviced loans coupled with slower resolution activity led to the spike in CMBS delinquencies,” said Fitch Managing Director Mary MacNeill. “Despite the 37 basis point uptick, delinquencies are still trending within Fitch’s projection of 10% by year's end.”
The delinquency rates for the various sectors are: multifamily: 15.92% (from 15.69% in June); hotel: 14.22% (from 13.85%);industrial: 10.45% (from 9.89%); retail: 7.01% (from 6.84%); and office: 6.64% (from 6.14%).
July resolutions from the index reached $1.4 billion fell well shy of the $2.3 billion per month rolling 12-month average.
According to Fitch, the volume of new delinquencies was also 24% higher than average. Meanwhile, Fitch’s Ratings’ rated portfolio continued to shrink, dropping over $100 billion (20%) from its June 2008 peak. This contraction makes up roughly 180 basis points of the current delinquency rate.
