Fitch: U.S. CMBS Delinquencies Fall Again as Term Defaults Decline
NEW YORK--(BUSINESS WIRE)-- A slow month of defaults and loan resolutions led to the third straight drop in U.S. CMBS delinquencies, along with some encouraging peripheral signs of a positive turnaround, according to Fitch Ratings.
CMBS late-pays declined four basis points (bps) to 8.56% from 8.60%, as new delinquencies totaling $1.6 billion were offset by $1.7 billion of resolutions in October. The new delinquencies consisted largely of smaller loans defaulting at maturity.
Fitch is beginning to see larger loan defaults become more sporadic, which may be indicative of a developing positive trend. October's new delinquencies included 14 loans with a balance of $25 million or greater (only one of which had a balance over $100 million), which is in line with the previous two months. This compares to an average over the preceding two years of 24 loans per month with a balance of $25 million or greater (of which, on average, three have had a balance of at least $100 million).
Another encouraging sign is fewer 30-day delinquencies in the pipeline. As of last month, $1.5 billion of loans with an average balance of $8 million were 30 days delinquent (compared with $2.2 billion in September). $790 million of the 30-day total consisted of loans that were already 30 days or more past due one month prior (and in some cases showed month-over-month improvement).
Delinquency rates per property type are as follows:
--Multifamily: 15.99% (from 15.77% in September);
--Hotel: 12.54% (from 12.42%);
--Industrial: 10.28% (from 10.02%);
--Retail: 6.83% (from 6.94%);
--Office: 6.29% (from 6.61%).
Additional information is available in Fitch's weekly e-newsletter, 'U.S. CMBS Market Trends', which also contains recent rating actions and an overview of newly released CMBS research, including Fitch presales and Focus reports. The link below enables market participants to sign up to receive future issues of the E-newsletter:
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