Despite improving performance on loans backed by apartment buildings, hotels and industrial properties — delinquency on securitized commercial mortgages moved higher last month. Behind the deterioration were loans on office and retail properties. The forecast is for even more defaults.
Commercial real estate loans included in commercial mortgage-backed securities had a 30-day delinquency rate of 9.58 percent in December. The rate was determined based on delinquent loans valued at $58.5 billion.
The rate worsened from 9.51 percent in November, according to Trepp LLC, which reported the data. But there was no change in the balance of past-due loans.
It was the third time in four months that CMBS delinquency increased. During all of 2011, the rate was up eight times.
“We view this as the first of a six to twelve month stretch where the rate could increase by 75 basis points in aggregate,” Trepp Senior Managing Director Manus Clancy said in the report. “This will come as a result of the first wave of 2007 originated loans reaching their balloon dates over the next few months.”
The delinquency rate on multifamily loans was 15.57 percent last month, the highest rate of any property type. Past-due payments on apartment loans, however, were down 61 BPS from November.
Commercial mortgages backed by hotel properties had a 12.20 percent delinquency rate, improving from November’s 12.28 percent.
At 12.03 percent, securitized loans on industrial properties were 17 BPS better than the previous month.
Behind last month’s overall worsening performance was delinquency on retail properties, which jumped 33 PBS to 7.85 percent.
Also fueling December’s deterioration were office loans, with the past-due rate rising 21 BPS to 8.97 percent.
