Fitch Ratings said that the CMBS delinquency rate is set to undergo yet another dip once an impending modification of the $678 million Skyline Portfolio loan is finalized.
U.S. CMBS delinquency fell at a modest pace in August following a record drop in July but September is likely to also see a big drop on the back of the upcoming loan modification. Skyline is currently the second largest delinquent loan in Fitch’s index.
The Skyline Portfolio is spread across three CMBS transactions and is backed by eight office buildings in Falls Church, VA totaling roughly 2.5 million square feet.
The loan transferred to special servicing in March 2012 for imminent default. The sponsor,Vornado, cited the Defense Base Realignment and Closure statute as contributing to recent and upcoming vacancies at the properties.
According to Fitch, resolution of the Skyline loan will contribute to a 12 basis point drop in the CMBS delinquency rate.
CMBS late-pays fell 10 basis points in August to 6.68% from 6.78% a month earlier. In July the rate feel by 40 basis points from the prior month.