Delinquency on securitized commercial real estate loans soared more than 20 basis points last month and is expected jump at least 50 BPS more by year-end.
Delinquency of at least 60 days on loans that are included in commercial mortgage-backed securities was 3.72 percent as of mid-year 2017.
The past-due CMBS rate surged 22 basis points when compared to May 31, 2017.
That was the biggest month-over-month spike since July 2011, when the rate peaked out at 9.01 percent.
Fitch Ratings, which reported the performance metrics Monday, blamed the deterioration on a surge in loan maturity defaults.
Fitch predicts the CMBS delinquency rate will finish the year between 4.25 percent and 4.50 percent.
Still, things could be worse.
“The silver lining here is that halfway through 2017, loan delinquencies so far remain considerably below Fitch’s estimate of between 5.25 percent and 5.75 percent,” the New York-based ratings agency stated in the report.
“The primary reasons are strong repayment activity of maturing loans during the first six months of the year, many of which were previously identified as highly leveraged and would face difficulty refinancing.”
Delinquency on industrial properties was 5.17 percent last month, leaping from the preceding month by 43 BPS — more than any other property type.
A 36-basis-point rise from May 2017 left the retail CMBS rate at 6.23 percent.
CMBS loans secured by office buildings saw the 60-day rate rise 33 BPS to 6.23 percent as of June 30, 2017.
At 2.84 percent, the past-due rate on securitized hotel loans was 22 BPS worse than in the previous report.
Multifamily loans had a 60-day rate of 0.67 percent as of June 2017, up 6 BPS from the prior month.
The rate on securitized mixed-use properties was 4.20 percent, down a basis point from May.
