Although CMBS delinquency rates have not seen the double-digit rates many industry analysts predicted would have happened by now, maturing 2007 vintage deals can change that picture.

According to a report by FTN Financial analysts today, the delinquency rate in 2011 increased by a total of 38 basis points, which is a vast improvement over the previous two years when the total delinquency rate rose by over 300 basis points (2010) and almost 500 basis points (2009).

"At the end of 2009, a year which saw the delinquency rate jump from a little over one percent to six percent, many were predicting a 'double-digit' delinquency rate by the end of 2010," analysts said in the report. "Two years later, the total delinquency rate has yet to crack the 10% barrier."

However, although the CMBS market has beat the odds so far, it's possible that the 2007 vintage loans could pressure delinquency rates up. According to the FTN report, in 2011, the 2007 vintage remained the worst-performing vintage despite a decrease of thirty basis points to the total delinquency rate last month.

Addionally, analysts said that with the original five-year balloons from the 2007 vintage — the largest CMBS vintage with over $230 billion issued at the peak of CRE prices — beginning to mature, this 2007 crop of deals will continue to present a problem area for the market.

"We do expect the number of loans in special servicing to increase in the first-half of 2012 as the five-year balloons from the 2007 vintage begin to mature," analysts said.

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