Performance on securitized commercial real estate loans improved to its lowest level since before the nation fell into recession.
The rate of 60-day delinquency on loans that are part of commercial mortgage-backed securities was 4.72 percent last month.
Turns out that January’s delinquency rate was the lowest it’s been since the onset of the Great Recession.
That is according to Fitch Ratings.
Although the CMBS delinquency rate increased from 4.62 percent a month earlier, the increase was due to an update to Fitch’s methodology. Had no change been made, last month’s delinquency rate would have only been 4.55 percent — “a post-recession low.”
A year earlier, the 60-day rate was 5.89 percent.
“Despite declines in new delinquencies, improvements in the overall delinquency rate remained tempered by the inventory of real-estate-owned assets awaiting disposition,” the ratings agency said in the report. “At the end of January, REO assets (by stated balance) comprised 3 percent of Fitch’s rated U.S. CMBS universe, or nearly two-thirds of total outstanding delinquencies.”
The biggest improvement was made on securitized industrial property loans, with the 60-day rate tumbling 21 basis points from December to 5.04 percent.
Next were hotel loans, which saw delinquency decline 5 BPS to 6.15 percent.
A 1-basis-point improvement left multifamily delinquency at 5.21 percent in January and office loan delinquency at 5.00 percent.
The 60-day rate on retail property loans worsened 2 BPS last month to 5.39 percent.
