An increase in new issuance in October drove commercial mortgage-backed securitization delinquencies down for six consecutive months to lowest levels in two years, according to Fitch Ratings.
October marked the highest month for Fitch-rated issuance in five years.
Late-pays of CMBS fell 12 basis points last month to 8.17% from 8.29% last month, marking the rate’s lowest level since 2010. Two years ago, it stood at 7.86%.
"CMBS delinquencies appear poised to drop below 8%, though large loans moving into and out of delinquency make the index susceptible to volatility," managing director Mary MacNeill of Fitch Ratings said.
Resolutions of $1.5 billion outpaced additions to the index of $1.3 billion in November. Also, $.6.6 billion in Fitch-rated deals closed last month, offsetting $4.6 billion in portfolio runoff.
Delinquency rates were highest for multifamily at 9.92%, compared to 10.45 last month. Hotels were 9.83%, up from 9.58% in October.
Retail had the lowest delinquency rates at 7.28%, which is down from 7.35% last month.
In a Moody’s report, retail properties had the second-highest loss of severity — the percentage of lost principal when a loan is foreclosed — at 47.3%.