CMBS delinquencies fall to 8.64% in June
Delinquencies on loans underlying commercial-mortgage backed securities fell 17 basis points to 8.64% in June, suggesting loan performance in the segment is stabilizing somewhat, Fitch Ratings said this week. Fitch's conclusion is in-line with a Trepp analytics report that shows the CMBS delinquency rate plunging 23 basis points in June, making it the second-straight monthly drop and the only consecutive decrease since the financial meltdown hit three years ago. Fitch says the decline in delinquencies is the result of more loan resolutions and a slowdown in defaults. "CMBS delinquencies are likely to remain somewhat volatile with fairly large month-over-month fluctuations," said Fitch managing director Mary MacNeill. "Many loans in special servicing range from $100 million to over $1 billion so the ultimate outcome of these loans could notably swing the delinquency index." Last month, $2.5 billion of loans that were previously classified as delinquent in Fitch's ratings pool were eventually resolved or liquidated, making it the second-highest one-month resolution total on record since October of last year. The amount saved from fixing these loans outweighed the $1.8 billion in new defaults, which led to a lower overall delinquency rate. Multifamily properties still had the highest delinquency rate (15.69%) among all property types in June, down from 16.37%. Hotel properties ranked second with a 13.85% delinquency rate, followed by industrial (9.89%) and retail properties (6.84%). Write to Kerri Panchuk.