CMBS delinquency rate rose to 8.63% in November: Moody's
The number of delinquencies in commercial mortgage-backed securities continued to climb in November rising to 8.63%, according to Moody's Investors Service. Analysts said the Moody's Delinquency Tracker has remained on a steady upward trajectory during the second half of this year, although the rate hasn't increased by more than 25 basis points in any month. November's rate is 24 bps higher than the 8.39% for October, which was up from 8.24% for September. The increase last month was the largest since May but still significantly lower than the monthly average of more than 50 bps in the first half of 2010. "As has been the case in recent months, the resolution and liquidation of troubled loans has helped to largely offset the increase in delinquent balance," said Moody's Managing Director Nick Levidy. There are 4,091 delinquent loans in CMBS valued at $53.8 billion at the end of November, which is an increase of 49 loans and $1.1 billion. October was the first month of more than 4,000 delinquent mortgages, analysts said. "Loans from the 2007 vintage continue to have the highest delinquency rate of any vintage at 10.86%, over 200 basis points higher than the rate for all vintages," according to Moody's. The delinquency rate for this vintage rose 45 bps last month, suggesting "that there is little, if any, slowing in the rate of increase." Conversely, the delinquency rate for the 2008 vintage decreased 82 bps in November, as small changes in balance have a big effect because the outstanding balance is small, Moody's said. Delinquency rates rose across all property types in November, with the largest gains in office space, 6.72% from 6.28%, and retail, 7.14% from 6.87% in October. The delinquency rates for all property types last month are roughly double the rates for the year-ago November: industrial 6.38% vs. 3.11%; multifamily 13.9% vs. 7.4%; office 6.72% vs. 2.95; retail 7.14% v. 4.24%; and hotel 16.42 vs. 7.8%. The South and West continue to have the highest rates of delinquent mortgages within the CMBS space at 10.86% and 9.7%, and the rates are up considerably from October and well above the year earlier. Meanwhile the delinquency rate in the mortgages included in CMBS in the Midwest slid to 8.57% in November from 8.63% a month earlier, and the rate in eastern part of the country inched up to 6.6% from 6.59%. Write to Jason Philyaw.