Fitch: CMBS Performance Relies on Office Properties

Fitch analysts said that the performance across CMBS property types has been dependent on the state of office properties, according to Fitch Ratings’ most recent U.S. Structured Finance Snapshot. This sector “will likely continue to see net operating income declines unless the property is in a core market such as New York,” said Huxley Somerville, managing director and CMBS group head.
 
By contrast, the rating agency projected that multifamily and hotels will likely experience average net operating income near historic peaks at the end of 2012.
 
Additionally, Fitch expects loan delinquencies to stay fairly flat for the rest of the year, with only office properties predicted to climb. The same picture holds for defaults in the sector. Loans on office properties contributed 47% of all defaults for the first six months of this year.
 
The recent drops in consumer spending is making retail properties a “continued focal point,” the rating agency said. This has held true in terms of new transactions where retail loans have been making up a big portion of the newly securitized collateral.