September Brings a Decline in CMBS Delinquency Rate for Everything But Retail

September Brings a Decline in CMBS Delinquency Rate for Everything But Retail

A just-released index from credit ratings agency Fitch shows that CMBS loan delinquencies fell by six basis points from August to September, to 4.46 percent for all property types. Year-over-year, the CMBS delinquency rate for all properties is down 31 basis points, according to Fitch calculations.

When considered by property type, CMBS delinquency rates fell for office, industrial, multifamily and hotel assets in September. By far, the greatest improvements were evident in the hotel and industrial sectors. The CMBS delinquency rate for hotel properties fell by 63 basis points, to 4.64 percent, and the CMBS delinquency rate for industrial properties fell by 55 basis points, to 4.35 percent.

The delinquency rate in the office sector fell by 9 basis points month-over-month, to 4.95 percent, and in the multifamily sector, the delinquency rate fell 8 basis points, to 4.47 percent.

On the other hand, retail and mixed-use properties experienced an uptick in CMBS delinquencies. The delinquency rate for retail went up by 10 basis points during the month to 5.58 percent. And the delinquency rate for mixed-use assets rose by 59 basis points, to 4.17 percent, from 3.58 percent previously.

Research firm Trepp LLC also reported declining CMBS delinquency in September, with the delinquency rate for all property types now at 5.28 percent, down 17 basis points from August and 75 basis points from a year ago.

“Almost $700 million in loans were cured last month, which helped push delinquencies lower,” Trepp researchers wrote. “CMBS loans that were previously delinquent, but paid off with a loss or at par totaled almost $1.3 billion in September.”

Trepp also found that retail was the only one of the core commercial property types that experienced an uptick in delinquency in September, by 20 basis points to 5.73 percent. Trepp doesn’t track the delinquency rate for mixed-use properties.

The firm reported that the CMBS delinquency rate for industrial properties fell 144 basis points, to 6.18 percent, followed by the delinquency rate for the multifamily sector, which fell 79 basis points to 8.20 percent. The hotel sector registered a 16 basis points improvement, to 3.28 percent, and the office sector showed a five basis points decline in delinquency, to 5.81 percent. 

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