Forty-seven percent of the commercial mortgage-backed securities loans maturing in March failed to pay off on time, according to credit ratings agency Morningstar Inc.
The firm said $1.7 billion in CMBS loans were slated to mature in March. Of those loans, approximately $780 million, or 47%, did not pay off on time.
Studying the high rate of loans that failed to payoff, Morningstar said the results underscored its belief that “many of this year’s maturing loans are over-leveraged.”
About 28% of the loans that failed to pay off in March (valued at $461 million) are now considered delinquent in payment, up from only 19% in January and 26% in February.
Today, 19%, or $319 million in CMBS loans, are active and current in their monthly payments, down from 34% in January and 24% in February.
The report also noted that 32% of loans with a loan-to-value ratio under 80% didn’t pay off, suggesting credit markets are difficult even for lower-risk CMBS loans.