Jan 11 - U.S. CMBS delinquencies closed out 2012 with seven straight months of declines, while late-pays on office and retail loans bear close watch this year, according to the latest index results from Fitch Ratings.
CMBS delinquencies fell 18 basis points (bps) last month to 7.99% from 8.17% a month earlier. In December, resolutions of $1.7 billion outpaced additions to the index of $1 billion. In addition, $4 billion in new Fitch-rated deals closed in December. No loans over $100 million transferred into the index last month, the second straight month this has occurred.
Multifamily, hotel, and industrial delinquency rates improved last year. Multifamily delinquencies dropped the most of any major property type, beginning the year at 14.42% and falling 430 bps to close out 2012 at 10.12%.The second most-improved sector in 2012 was hotels, which began the year with delinquencies of 12.02% and finished 315 bps lower at 8.87%.
Conversely, office loans were the poorest performers last year and remain a cause for concern heading into 2013. Office delinquencies began 2012 at 6.84% but rose 157 bps to close out the year at 8.41%. Retail also ended 2012 in worse shape than it started but overall has remained the most stable property type.
Current and previous delinquency rates are as follows:
--Multifamily: 10.12% (from 9.92% in November and 14.42% at year-end 2011)
--Hotel: 8.87% (from 9.83% and 12.02%)
--Industrial: 8.61% (from 8.88% and 10.25%)
--Office: 8.41% (from 8.63% and 6.84%)
--Retail: 7.14% (from 7.28% and 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: