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CMBS Delinquencies Now Exceed $50B

CMBS Delinquencies Now Exceed $50B

In March, the delinquent unpaid balance for CMBS rose $3.23 billion, up to $51.05 billion from $47.82 billion a month prior, according to Horsham, Pa.-based Realpoint LLC.

Overall, the delinquent unpaid balance is up 268 percent from a year ago and is now more than 23 times the low point of $2.21 billion in March 2007. The distressed 90+-day, foreclosure and REO categories grew in aggregate for the 27th straight month—up by $2.57 billion from the previous month. The total unpaid balance for CMBS pools reviewed by Realpoint for the March remittance was $798.22 billion, up slightly from $797.1 billion in February.

The delinquency ratio for March of 6.4 percent (up from the 6.0 percent reported for February) is more than four times the 1.66 percent reported in March 2009 and 22 times the Realpoint recorded low point of 0.28 percent in June 2007.

Realpoint maintained its projection for the delinquent unpaid CMBS balance, which it expects to reach between $60 billion and $70 billion by mid 2010. The firm also projects the delinquency percentage to grow to between 8 percent and 9 percent through mid 2010 and potentially surpass 11 percent to 12 percent under more heavily stressed scenarios through the end of the year.

By property type, in March, retail loans topped multifamily loans as the greatest contributor to overall CMBS delinquency, at 1.54 percent of the CMBS universe and 24.1 percent of total delinquency. The retail default rate increased to 5.60 percent, up substantially from 1.8 percent one year ago. Realpoint expects retail delinquencies to continue to increase throughout 2010.

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