Overall CMBS Delinquencies Remain Stable in September

Despite rising office delinquencies, Fitch Ratings reports that U.S. CMBS loan delinquencies continued to fall in the month of September. The overall balance of delinquent loans for all property classes fell from 1.42% at the end of August to 1.29% one month later.

"While pleased to see that the overall dollar balance of delinquent loans in CMBS transactions is continuing to drop, Fitch continues to be cautious in evaluating the outlook for the office loan sector," says Mary O’Rourke, senior director at Fitch.

Fitch projects that delinquencies in the office sector aren’t likely to end this year. But the pace of delinquencies should taper off in 2005. Over the past month, eight new office loans totaling $78.6 million were added to the delinquent list. The two largest loans were for California properties: a $24.3 million loan in San Mateo and a $15.2 million loan in Santa Clara.

"On a dollar basis, office delinquents increased by 12%, while by comparison industrial loans increased by just under 5% and multifamily loand by slightly more than 1%," says O’ Rourke.

Both hotel and health care loan delinquencies continued to decline over the past month. A total of 13 hotel loans were removed from the delinquent list while the overall decline in healthcare loans was almost 10%. Retail delinquencies fell by 3.4%.

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