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CMBS Performance Takes Turn for Worse

Mortgage News

Hurt by deterioration in the office property sector, monthly delinquency on securitized commercial mortgages was higher. Hotel loans also played a role in the declining performance.

September’s 60-day delinquency rate on commercial real estate loans that are part of commercial mortgage-backed securities conduit-fusion transactions was 9.36 percent.

The rate deteriorated from 9.01 percent in August. During the same month last year, the level of delinquency was lower at 8.24 percent.

The CMBS statistics are based on Moody’s Investors Service’s Delinquency Tracker.

Of loans that were delinquent in August, $2.5 billion were resolved last month, slowing from $4.1 billion in resolved mortgages a month prior. Loans that became newly delinquent jumped to $4.2 billion from the previous month’s $2.6 billion in loans the rolled into the category.

The rate of late payments on securitized multifamily loans was around 15 percent. The rate was 15.21 percent in August. Multifamily delinquency has worsened from a year prior, when the rate was 13.42 percent.

Hotel delinquency jumped to 14.81 percent in September from 14.56 percent. Performance in the hotel sector has improved since September 2010 when the rate was 15.94 percent.

Office delinquency was up 80 BPS to 8.16 percent. That was the biggest increase of any category. The office rate was just 6.40 percent a year prior.

Hawaii’s delinquency rate was hurt by the default of a $394 million loan. The Four Seasons Resort Maui secures the loan — the second-largest newly delinquent mortgage.

Moody’s said its Specially Serviced Loan Tracker was down 10 basis points to 12.13 percent.

Outstanding CMBS issuance was $594.6 billion, declining $4.9 billion from August.

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