Fitch: CMBS Delinquency-Rate Exceeds 6%

The delinquency rate on upcoming maturities from U.S. CMBS deals originated in 2005  increased by 29 basis points in February, bringing the total rate to 6.29%, according to a report from Fitch Ratings, which studies CRE trends.

Declining performance, particularly in oversupplied markets, pushed Fitch’s multifamily delinquency rate to 8.97%, the highest of all property types.

The multifamily segment has been highly susceptible to default in CMBS during the current economic downturn. According to Fitch Managing Director Mary MacNeill, “Five-year loans originated in 2005 will continue to have difficulty refinancing this year as liquidity remains limited”.

Fitch also notes in its report that approximately 30% of the newly delinquent loans were from 2005 transactions. In fact, the four largest newly delinquent loans (ranging in size from $65 million to $112 million) are from this vintage.

Here is Fitch’s current delinquency rates by property type:

–Office: 3.50%;

–Hotel: 16.61%;

–Retail: 5.09%;

–Multifamily: 8.97%;

–Industrial: 4.16%.

“Fitch’s delinquency index includes 2,505 loans totaling $28.5 billion of the Fitch rated universe of approximately 42,000 loans comprising $452.6 billion that are at least 60 days delinquent or in foreclosure. The Index excludes Fitch-rated loans that are 30 to 59 days delinquent, which currently total $3.2 billion.”