Thanks to strong performance on apartment and hotel loans, overall delinquency on securitized commercial real estate loans was lower in January. It was a different story, however, for loans secured by retail and industrial properties. The state with the most bank failures last year is turning out to be a problem spot for CRE loans.
Sixty-day delinquency on loans included in commercial mortgage-backed securities finished the first month of the new year at 7.91 percent.
The rate of late payments improved from a month earlier, when the 60-day delinquency rate was 7.99 percent.
It was the eighth consecutive month that past-due payments on CMBS loans retreated, according to Fitch Ratings, which delivered the data. It was also the lowest level of delinquency since October 2010, when the rate was 7.78 percent.
In January 2012, CMBS delinquency was 8.32 percent.
The statistics were based on securities rated by Fitch. The ratings agency noted that $1.4 billion in loans were resolved last month, and $1.1 billion in commercial mortgages were added to the delinquent category.
New Fitch-rated CMBS issuance amounted to $0.6 billion during January, less than the $2.9 billion in runoff.
January’s biggest delinquency decline came with multifamily loans, with the rate dropping 39 BPS from December to 9.73 percent.
An 11-basis-point decline was reported for hotel loan delinquency, which landed at 8.76 percent in the latest report.
The 60-day rate on mortgages secured by office properties fell 8 BPS to 8.33 percent.
But the news wasn’t so good for retail property loans, with delinquency surging 29 BPS to 7.43 percent. Also turning in a sour performance were industrial property loans, with the rate moving to 8.69 percent from 8.61 percent.
Georgia was cited as a trouble spot in January, with delinquency jumping to 20 percent — the second-highest of any state. Nevada’s 20.7 percent rate was the highest.
Fitch highlighted two loans — a $71 million office loan and a $68 million retail loan — that were the two largest loans entering the index last month. Properties securing both loans are located in Atlanta.
“And it appears the worst is not over for this region,” the New York-based company wrote. “Fitch took a closer look at Atlanta office loans greater than $10 million that were REO as of the start of last year. Of those, four loans totaling $88 million were disposed of. It took an average of 18.2 months for those properties to be sold from the time they were foreclosed upon (with an average loss severity of 78 percent of the original balance).”
The Federal Deposit Insurance Corp. reports that Georgia saw more bank failures during 2012 than any other state: 10.
