Feb 10 - Delinquencies for office and retail loans have hit their highest-ever levels while overall U.S. CMBS delinquencies fell for the sixth straight month, according to the latest index results from Fitch Ratings.
CMBS late-pays declined five basis points (bps) in January to 8.32% from 8.37% a month earlier. The improvement was driven by multifamily loans, which saw a 165-bp plunge in its rate month-over-month to 12.77%. The delinquency rates for office and retail rose to all-time highs of 7.30% and 7.21%, respectively.
The downturn in office and retail performance comes as multifamily and hotel loans have shown the best performance rebound over the past 24 months, a trend Fitch expects to see continue. In fact, the multifamily delinquency rate has fallen 4.63 percentage points from one year ago to 12.77% from 17.40%.
Current and prior month delinquency rates for the major property types are as follows:
--Multifamily: 12.77% (from 14.42% in December);
--Hotel: 12.21% (from 12.02%);
--Industrial: 10.40% (from 10.25%);
--Office: 7.30% (from 6.84%);
--Retail: 7.21% (from 6.89%).
Additional information is available in Fitch’s weekly e-newsletter, ‘U.S. CMBS Market Trends’, which also contains recent rating actions and an overview of newly released CMBS research, including Fitch presales and Focus reports. The link below enables market participants to sign up to receive future issues of the E-newsletter: