Thanks to improvement in the performance of industrial and healthcare property loans, delinquency on securitized commercial mortgages reversed some of the hefty deterioration during the previous month. But the share of past-due loans remains at the second-highest level in at least two years and has to potential increase further.
Loans backing commercial mortgage-backed securities had a collective 30-day delinquency rate of 8.484 percent during June.
The rate improved from 8.533 percent in May, when delinquency jumped 34 basis points from the previous month. Still, CMBS delinquency sits at the second-highest level in at least two years (and possibly the second-highest CMBS rate ever).
The statistics were covered in the Monthly CMBS Delinquency Report from Morningstar Credit Ratings LLC.
Trepp LLC reported earlier this month that 30-day CMBS delinquency reached an all-time of 10.16 percent in June.
Morningstar’s report indicated that the 30-day rate was lower in June 2011 at 8.219 percent.
Out of the $712.91 billion in outstanding CMBS rated by Morningstar as of June 30, the delinquent portion worked out to $60.49 billion. A month earlier, $60.30 billion of the total $706.70 billion outstanding was past due.
“A denial by special servicers of borrower requests for loan extensions, modifications or debt restructuring, or a decision by borrowers to surrender the collateral, is still a legitimate concern throughout 2012,” Morningstar said. “Based upon this concern and despite the ongoing liquidation activity experienced over the trailing 12-months, the delinquent unpaid balance for CMBS still has the potential to reach 9 percent in 2012.”
Helping to bring down the CMBS delinquency rate last month were securitized industrial property loans, with the 30-day rate for the category falling to 10.6 percent from 12.0 percent in May.
Healthcare properties late payments fell 40 BPS to 6.5 percent.
At 11.7 percent, hotel loans had the highest rate. But hotel delinquency was down 10 BPS from May.
Also down 10 BPS were retail properties, at 7.7 percent, and multifamily loans, with a rate of 6.8 percent.
However, securitized mortgages backed by office properties saw an increase of 20 BPS to 10.2 percent.
