The loan resolutions from a single CMBS transaction is behind the 40 basis point drop in delinquencies last month; the largest monthly decrease since the end of the recession, according to the latest monthly index results from Fitch Ratings.
According to Fitch, CMBS late-pays fell last month to 6.78% from 7.18% in June. Leading the fall were ORIX asset sales from the LB-UBS 2007-C2 transaction, which alone accounted for $759 million (in stated loan balance) of dispositions.
“The ORIX sales helped drive delinquency rates for all major property types down last month,” said Fitch.
Delinquencies on office loans showed the most improvement, falling nearly 60 bps month-over-month, to 7.59% from 8.18% . Hotel delinquencies fell to 8.04% from 8.35%; Multifamily CMBS fell to 7.41% from 7.59% and retail CMBS fell to 6.37% from 6.74%.
July’s rate decrease was the third time in the last four months that CMBS delinquency rate fell and according to Fitch, newly MBS delinquent loans also continued to diminish in size. The average loan size of new entrants in July was just $8.5 million, with only four loans over $25 million entering the index.
