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CMBS Delinquency Rate Down to Two-Year Low: Fitch

A ""surge"" in new issuances brought down the CMBS delinquency rate in November to a two-year low, according to a report from ""Fitch Ratings"":http://www.fitchratings.com/web/en/dynamic/fitch-home.jsp.


The November CMBS delinquency rate stood at 8.17 percent, representing a decrease of 12 basis points (bps) from 8.29 percent in October, the ratings agency reported. The decrease marks the sixth consecutive month the rate has fallen and is the lowest level since November 2010, when the rate was 7.96 percent.


""CMBS delinquencies appear poised to drop below 8%, though large loans moving into and out of delinquency make the index susceptible to volatility,"" commented Mary MacNeill, managing director at Fitch.

In November, the agency saw the closing of $6.6 billion in Fitch-rated deals, which offset $4.6 billion in portfolio runoff. November was also the highest month for Fitch-rated issuance in five years, the report stated.

Fitch also explained resolutions in November outpaced additions to the index, with $1.5 billion in resolutions compared to $1.3 billion in additions.

Among the major property types, the multifamily delinquency rate fell the furthest in November, dropping 53 bps to 9.92 percent.

The office sector also saw its delinquency rate fall and decreased by 9 bps to 8.63 percent during the same time period.

The retail sector experienced a decrease as well and dropped 7 bps to 7.28 percent.

The hotel delinquency rate increased to 9.83 percent from 9.58 percent in October, while the industrial sector's rate moved higher to 8.88 percent from 8.76 percent.

About Author: Esther Cho


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