Moody’s Investor Services' delinquency tracker showed an increase in 21 basis points (7.71%) in June, the smallest one-month increase since August 2009.
The score indicated 294 loans, totaling $3.6 billion, were newly delinquent in June, the low for both count and balance in 2010. There are currently 3,986 total delinquent loans with an aggregate balance of $49.8 billion.
Although the increase in June’s delinquency rate was relatively small, the average increase in delinquency in 2010 is higher than previous years, showing an average increase of 47 basis points per month so far this year. The corresponding figures in 2009 and 2008 were 33 basis points and six basis points, respectively, according to the Moody’s report.
Office properties showed the largest amount of newly delinquent loans by balance, up approximately $1.2 billion. The figure is substantially lower than it was in May, when over $2.2 billion of office properties became newly delinquent. June’s results show an increase of 33 basis points for the office property delinquency rate, which now stands at 5.92%. The office property delinquency rate posted the second largest increase across property types, the report showed.
The hotel sector showed the largest increase in delinquency rates, rising 50 basis points to 13.75% There are 25 newly delinquent loans totaling over $400 million by balance.
Retail properties had the largest number of newly delinquent loans, at 84, and the second largest amount of newly delinquent loans by balance, with an aggregate balance just under $1 billion. However, $900 million worth of retail loans moved off the delinquent roles in June, resulting in a retail delinquency rate of 6.18% (up only eight basis points) .
Industrial properties showed the best performance for the second consecutive month, with a delinquency rate of 5.45%, an increase of 16 basis points. There are currently $115 million newly delinquent loans in the sector.
The delinquency rate for multifamily properties increased six basis points in June to 13.19%. Nearly $600 million of multifamily properties were newly delinquent in June, slightly less than the $630 million that are no longer considered delinquent. Although the total balance of delinquent multifamily loans declined this month, the delinquency rate still increased because the total balance of all multifamily loans decreased at a greater rate, Moody’s said.
In other CMBS news, DebtX is planning to sell around $200 million of performing commercial real estate (CRE) loans on behalf of a major financial institution in the U.S.
The deal will consist of 90 performing loans backed by properties in California, New York, Washington, Washington D.C. and Illinois. The loans were underwritten for multifamily, retail, industrial, office, warehouse, and mixed-use properties, as well as mobile home parks and self-storage facilities. Bids are due Aug. 18, according to DebtX.
“The loans offered in this sale will provide an opportunity to purchase product of very high quality,” said DebtX CEO Kingsley Greenland. “We’re expecting strong interest from national banks, community banks and institutional investors. For sellers, the sale of performing loans demonstrates how financial institutions can work with DebtX to rebalance their portfolios through active portfolio management.”
