| NEW YORK, June 18
NEW YORK, June 18 Delinquencies on mortgages
that underlie commercial mortgage-backed securities (CMBS) rose
by $1.63 billion in May, pushed up in part by the bankruptcy of
General Growth Properties Inc GGWPQ.PK, according to rating
The amount of delinquencies, up for the ninth straight
month, rose to a 12-month trailing high of $18.78 billion out
of a total unpaid balance of $835.4 billion of CMBS pools
Realpoint had under review at the end of May, the rating agency
said on Thursday.
The rising tide of delinquent loans reflects the weakening
of U.S. commercial real estate and inability of borrowers to
refinance maturing loans, and results in large part from the
loose lending that underscored the frenzied real estate sales
of 2005 through early 2007.
The delinquency amount compares with $4.01 billion a year
Loans in special servicing increased in May by an
unprecedented $12.53 billion to a trailing 12-month high of
$37.05 billion, Realpoint said.
When loans are in imminent default, they are typically
transferred from a master servicer, who oversees performing
loans in CMBS trusts, to a special servicer, who cares for
troubled loans, usually at a substantial fee.
Most of the increase, about $7.33 billion was due to the
transfer of loans on malls owned by General Growth, which filed
for Chapter 11 bankruptcy protection in late April. Retail real
estate comprised 42.8 percent of the assets in special
servicing because of General Growth. Retail real estate
surpassed multifamily, which made up 23.4 percent of the
specially serviced pool.
The percentage of loans in special servicing rose to 4.49
percent of all CMBS unpaid balances from 2.95 percent the prior
(Reporting by Ilaina Jonas; Editing by Steve Orlofsky)