CMBS Delinquencies Propelled by Five-Year Loans

Current delinquency rates by property type are as follows:

• Office – 3.5 percent
• Industrial – 4.16 percent
• Retail – 5.09 percent
• Multifamily – 8.97 percent
• Hotel – 16.61 percent

The 29 basis-point (bp) increase in delinquencies to 6.26 percent at the end of February was driven in large part by upcoming maturities from U.S. commercial mortgage-backed securities (CMBS) deals originated in 2005, according to the latest U.S. CMBS delinquency index results from Fitch Ratings.

“Five-year loans originated in 2005 will continue to have difficulty refinancing this year as liquidity remains limited,” said Mary MacNeill, managing director at Fitch. “In many cases, sponsors will have to either contribute additional equity in order to refinance their loans or look to the servicers for extensions and modifications.”

Fitch said approximately 30 percent of the newly-delinquent loans were from 2005 transactions. Furthermore, the four largest newly-delinquent loans, ranging in size from $65 million to $112 million, are from this period. Three of these four loans are already past their 2010 maturity dates and are now categorized as non-performing matured loans.  Click here to view the entire article by  BRITTANY DUNN