CMBS Delinquencies Swell to 5.5% in October, says BarCap

Delinquencies in commercial mortgage-backed securities (CMBS) accelerated in October, according to a report from Barclays Capital (BarCap).

The 30-plus day delinquency rate jumped 41bps to 5.5% in October as current loans deteriorated and transferred to special servicers. For the past three months, delinquencies have grown an average of 34bps, and BarCap analysts expect the pace to increase through 2009 and into 2010.

Younger vintages are falling into delinquency at a more severe rate than older ones, analysts noted. The 30-plus day delinquency rate on post-2005 vintages jumped 47bps to 5.63% in October, while pre-2005 vintages increased 27bps to 5.17%.

The delinquency rate for post-2007 vintages leaped 69bps in October to 5.32%, according to the report.

Hotels continued to lead the delinquent march. A total of $974m in loans backed by hotels fell delinquent in October, and the hotel delinquency rate grew 152bps to 7.81%. The 2007 vintage registered a 10.71% 30-plus day delinquency rate, the largest being the $150m Hyatt Regency – Jacksonville loan.

BarCap analysts pointed to a lack of demand and a failure to sustain a boost at summer’s end driving the delinquencies.

“Without the ‘protection’ of built-in leases, this points to more delinquencies in future months,” according to the report.

Write to Jon Prior.