Delinquency on securitized commercial real estate loans has improved every month for more than a year but faces headwinds.
Loans that were past due at least 60 days and included in commercial mortgage-backed securities accounted for 4.87 percent of all such loans in June.
The CMBS delinquency rate improved from a month earlier, when it stood at 4.97 percent.
Fitch Ratings reported the performance metrics.
The New York-based ratings agency noted that delinquency has retreated each of the past 15 months.
However, the outlook is not necessarily rosy.
“Although the rate has continued to decline, Fitch is tracking a number of larger loan special servicing transfers, as borrowers request modifications prior to upcoming loan maturities,” the report stated. “Should modifications not be granted, some of these loans may become delinquent, which could reverse or slow the declining trend.”
Total June resolutions of $827 million exceeded the $449 million in newly delinquent loans.
Last month’s improvement was led by industrial property loans, which saw the 60-day rate tumble 65 basis points from May to 5.78 percent.
On multifamily loans, delinquency dropped 27 BPS to 5.65 percent in June.
A 16-basis-point decline from the previous month left delinquency on securitized retail property loans at 4.82 percent.
At 5.13 percent, office loan delinquency was 9 BPS better than in May.
The only category to deteriorate was hotel loans, with the 60-day rate rising 18 BPS to 5.30 percent in June.
