Large multifamily defaults caused a 36 basis point increase in U.S. CMBS delinquencies, bringing them up to 8.59%, according to the latest Loan Delinquency Index results from Fitch Ratings.
Late-pays within the multifamily sector rose to 17.40% from 15.63% last month, which is the highest level since the rating agency started tracking CMBS delinquencies. Three large loans worth $915 million made up the biggest portion of the $1.2 billion in new multifamily defaults.
The $10.1 billion of multifamily-backed loans now in default is heavily concentrated, according to Fitch. The agency reported that 955 multifamily loans it rated are now delinquent. There are 15 loans that range from $54 million to $2.8 billion making up half of the delinquent dollars worth $5 billion.
Current delinquency rates by property type are listed as the following: multifamily with 17.40% (from 15.63%); hotel with 14.43% (from 13.99%); industrial with 8.53% (from 6.24%); retail with 6.88% (from 7.20%); office with 5.50% (from 5.69%).
"While the multifamily sector is generally expected to stabilize in 2011, certain high-profile defaults continue to run up the sector’s delinquency rate," Fitch Managing Director Mary MacNeill said. "More defaults are likely for collateral with cash flow that was not stabilized at issuance and cash-strapped borrowers that over-leveraged their properties at the height of the market."