CMBS Delinquencies and Special Servicing Hit Record Highs
As HousingWire reported over the weekend, the delinquency rate on commercial mortgage-backed securities (CMBS) conduit and fusion loans posted the largest single monthly increase on record. US CMBS loans are also transferring to special servicing status faster and greater than ever before. The delinquency rate on CMBS conduit and fusion loans, structured finance revolving liquidity platforms, rose by 52 bps in January, driving the total rate to 5.42% in February, according to a report by Moody’s Investors Service. The total delinquent balance is more than $36bn – a $3bn rise over the previous month. It marks the largest increase in the delinquency rate, by dollars and basis points, as recorded in the current downturn by Moody’s: A total 409 CMBS conduit and fusion loans became newly delinquent in January. The multifamily loan category grew 63 bps to 8.77% delinquent in January. The South region led multifamily delinquencies; although this district represents 30% of the overall multifamily balance, it represents more than 40% of the overall newly delinquent balance. The southern multifamily delinquency rate grew 85 bps in January, reaching 12.3% delinquent - the highest of the four regions. Hotel loans rose 75 bps to 9.82% delinquent, the highest of all commercial loan categories (illustrated below). The West led hotel loan delinquencies this month, rising 100 bps to 12.3%. Three newly delinquent hotels in San Diego comprise more than 60% of the newly delinquent western hotel loans. But the overall western hotel delinquency rate was second only to the South, which grew 76 bps to 14.1% delinquent. US CMBS loans are also transferring to special servicing, a status denoting deteriorating collateral performance, in larger increments and at faster speeds than ever before, according to weekly commentary by Fitch Ratings. In January, 248 loans worth $4.27bn moved into special servicing - more than four times the balance sheet that transferred a year ago. The size of specially serviced loans has increased 2.4 times from 2009 to $17.2m, with five CMBS loans over $100m. "More loans will approach final maturity without available extensions or a refinancing commitment," said managing director Mary MacNeill. "Available liquidity remains limited, which is making refinancing large loans more difficult even when they are performing." Retail loans lead CMBS loans by dollar volume with $15bn in special servicing. Hotel loans follow with $11bn in special servicing. Multifamily and office loans have $9.8bn and $7.5bn, respectively, in special servicing. Write to Diana Golobay.