CMBS Delinquency Rates Trending Upward: Report

The delinquency rate among commercial mortgage backed securities (CMBS) rose in eight of 12 months in 2011, according to a report released Wednesday by ""Trepp."":http://www.trepp.com/

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Most recently, the rate rose seven basis points to 9.58 percent for the month of December. This rate is up from six months ago and one year ago when the rate was 9.37 percent and 9.2 percent, respectively.

Serious delinquencies saw a greater increase over the month of December, rising 18 basis points to 9.06 percent.

As with the overall CMBS delinquency rate, the serious delinquency rate is higher than it was six months ago â€" 8.33 percent â€" and one year ago â€" 8.75 percent.

December's overall CMBS delinquency increase follows a monthly decrease in November, when delinquencies fell from 9.77 percent to 9.51 percent.

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Trepp ""view[s] this as the first of a six to twelve month stretch where the rate could increase by 75 basis points in aggregate,"" as loans originated in 2007 begin reaching their balloon dates.

Multifamily properties continue to fare worst among major categories of CMBS properties, despite a 61 basis point drop over the month of December. The rate stood at 15.57 percent at the end of the year.
Multifamily delinquencies are also down from one year ago when the rate was 16.48 percent.

Lodging ranked second for delinquency rate at 12.20 percent with industrial properties following closely behind at 12.03 percent.

Industrial properties saw the largest year-over-year increase in delinquencies, rising 3.06 percent from December 2010 to December 2011.

Office and retail properties posted the lowest delinquency rates at 8.97 percent and 7.85 percent, respectively in December. Both experienced gains over the month of December.

However, retail properties are in line with their rate one year ago, which was 7.86 percent.

Office properties are up over the year from 6.93 percent in December 2010.