Late payments on commercial mortgage-backed securities loans declined 14 basis points in July, falling to 8.48% from 8.62% a month earlier, Fitch Ratings said in a new report.
The drop is attributed to more loan workouts, including the modification of two large loans: the $305 million Schron Industrial Portfolio (GCCFC 2007-GG9) and the $210 million Savoy Park (CSMC 2007-C1) loan.
July marks the second consecutive month of declines for U.S. CMBS delinquencies, according to a Fitch report compiled by Fitch Managing Director Mary MacNeill and Associate Director Melissa Che.
Delinquencies on office CMBS loans fell 15 basis points, while hotel CMBS late pays saw a 24 basis point increase after experiencing delinquency drops for several months in a row.
"Delinquencies on office properties enjoyed a bit of a reprieve this past month, though it is not likely to last," said Mary MacNeill, managing director at Fitch Ratings.
About 42 office loans valued at $512 million together returned to performing status, improving the segment's delinquency rate. Meanwhile, the hotel sector had 11 new loans valued at $280 million listed as newly delinquent, pushing the segment's delinquency rate higher.
The multifamily CMBS loan delinquency rate fell from 11.64% in June to 10.89%, Fitch said. Hotel CMBS delinquencies also hit 11.46% last month, up from 11.22% in June.
Industrial CMBS loans declined to an 8.68% delinquency rate in July, compared to 9.93% a month earlier. Office delinquencies also declined to 8.43% from 8.58% in June.
Retail delinquencies also dropped, hitting 7.40% last month, compared to 7.67% a month earlier.