The continued turnaround of hotels added to another decline for U.S. CMBS delinquencies, according to the latest index results from Fitch Ratings.
Approximately $604 million in resolved hotel-backed loans resulted in a slight drop of five basis points (bps) for CMBS late-pays, bringing the overall rate to 8.60% from 8.65%.
After hitting an all-time high of 9.01% in July, CMBS delinquencies are now
down each of the last two months. According to Fitch, the $1.5 billion of new delinquencies in September represents the lowest volume of new defaults in almost three years (when the index stood at 1.28% at February 2009).
"Roughly four years after the economic crisis began, signs of stability are slowly emerging for commercial real estate,’ said managing director Mary MacNeill. "Though office and retail-backed loans are lagging as expected, hotels are now benefiting from their ability to reset rates on demand, resulting in enhanced liquidity and renewed investor interest."
Hotel exposure to CMBS 2.0 deals is about 8% according to Trepp data, up from 5% earlier this year. Lodging is a distant third among the property types in recent deals, behind retail at 47% and office at 27%.
