CMBS Delinquencies Grow 504% since '08: Realpoint
In October, the delinquent unpaid balance for commercial mortgage-backed securities (CMBS) grew 504% from last year, according to research from Realpoint, which tracks monthly CMBS delinquency trends. The delinquent balance increased to $32.5bn in October from $31.7bn the month before. In October 2008, the delinquent unpaid balance for CMBS was only $5.3bn. At its low in March 2007, the reported delinquent balance was $2.2bn, according to Realpoint’s report. Four of the five delinquent loan categories experienced an increase in October with only the 60-day delinquent bucket declining. But, despite the drop, the total delinquency balance of 90-plus day, foreclosure and real estate owned (REO) buckets grew for the 23rd straight month as it rose 12% from the month before and 572% from last year. Realpoint anticipates the delinquency percentage for CMBS to increase between 5% and 6% through the Q110. It could approach and surpass 7% through the mid-2010. On the lending side of commercial real estate, Banc Investment Group (BIG) reported its commercial real estate lending index, which measures lending conditions for community banks, dropped 10.6% in Q309. “The Index results from the third quarter indicate that bankers will face tough challenges in managing their balance sheet in coming quarters and need to be pro-active in addressing problem loans," said Chris Nichols, president and CEO of BIG, the capital markets subsidiary of Pacific Coast Bankers’ Bancshares. Write to Jon Prior.