Moody's Investors Service's latest CMBS Delinquency Tracker (DQT) reported that the aggregate rate of delinquencies among CMBS conduit and fusion loans is at 4.47%. The results are based on the data through the end of November.

The 46 basis point rise over the previous month was the largest yet of the economic downturn, according to the rating agency. 

The Moody's report said that the balance of delinquent CMBS loans stood at $6.7 billion in December 2008 and has risen by over $23 billion in the past 12 months.

"The delinquency rate has now increased 29-fold over its low point of 0.22% reached in July 2007", said Nick Levidy, a Moody's managing director. "Most of this increase has occurred in 2009, as delinquencies started the year at 0.95%."

The rating agency also delineates a substantial variation in delinquency rates among property types and geographic regions, with hotel and multifamily properties experiencing the sharpest increases and highest rates.

The delinquency rate on loans backed by hotel properties increased by 160 basis points during November, to end the month at 7.80%, Moody's said. Multifamily properties experienced the second biggest rise in its delinquency rate, going up by over 90 points to 7.40%.

Meanwhile, the delinquency rates on loans backed by industrial properties rose 28 basis points to 3.11%, while office property delinquency rate rose 25 points to 2.95%, the rating agency reported.

"As we pointed out in our recent Commercial Real Estate and CMBS outlook, the property sectors with the shortest lease terms have suffered the most so far in this downturn," Levidy said. " However, those sectors are also expected to be the first to recover."

The delinquency rate is still rising across all the country's regions with the South and the Midwest experiencing higher levels than the West and the East.

The South experienced the largest increase in its delinquency rate in November, jumping 66 basis points to 6.27%, the highest rate of the four regions. The Midwest has the second highest rate, at 5.16%, but saw a relatively mild 21 basis point increase during November.

The East and West saw similar increases over November, the East's delinquency rate rising 37 basis points to 2.95% and the West increasing 36 basis points to 4.77%.

Four states — Nevada, Rhode Island, Arizona and Michigan — have delinquency rates over 10%, while all the other states have rates less than 8%, according to Moody's. These four states, however, account for less than 7% of all outstanding loans. The two states with the biggest shares of outstanding loans have rates less than the country as a whole, California with a rate of 3.88% and New York at 2.47%.

The Delinquency Tracker is a suite of metrics intended to complement the rating agency's ongoing CMBS tools such as Moody's REAL/Commercial Property Price Indices (CPPI) and Moody's Red-Yellow-Green® Report.

It tracks CMBS loan performance, including loans in transactions not rated by the rating agency, in detail by vintage, region and property type, and derives forward-looking analysis from these results.

 

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