Additional details on CMBS delinquencies from Moody's and IYR is out of control

New York, May 12, 2010 -- The delinquency rate on loans included in US Commercial Mortgage Backed Securities (CMBS) increased 60 basis points in April to 7.02%, according to Moody's Investors Service's Delinquency Tracker (DQT). The April increase was the second biggest jump in the history of the DQT, only nine basis points short of the record 69 basis point increase in March.

April saw a net increase of nearly $3.7 billion to the balance of delinquent loans, says Moody's. During the month, 415 loans totaling $5.9 billion moved into delinquency, while 230 loans became current or worked out, reducing the delinquent balance by about $2.3 billion.

Moody's Delinquency Tracker (DQT) tracks all loans in US conduit and fusion deals issued in 1998 or later with a current balance greater than zero.

By property type, the hotel sector regained the dubious distinction of having the highest delinquency rate, rising 171 basis points to 12.98%.

The March leader, multifamily, rose 68 basis points during April to 12.87%.

The office sector continued to have the lowest delinquency rate, after a 46 basis point rise during the month to 4.58%.

The industrial sector saw delinquencies increase by 67 basis points in April to 5.24%, while the rate for retail increased 29 basis points to 5.86% during the month.

By region, the West saw the steepest climb in its rate of delinquencies, which rose 115 basis points in April to 7.76%. The West now has a higher delinquency rate than the Midwest, which finished April at 7.49% after a 55 basis point increase.

At 8.76%, the South continues to have the highest rate. Its increase in April, however, was the smallest of any region, at only 31 basis points.

The East saw delinquencies increase by 48 basis points in April, to 5.62%, the lowest among the four regions.

By state, Nevada saw its rate soar after two loans backed by exhibit halls in Las Vegas moved into foreclosure. It now has a 20.02% delinquency rate after a 607 basis point increase, which exceeds the rate for any other state by more than 500 basis points.

The report "US CMBS: Moody's CMBS Delinquency Tracker, May 2010," is available on Moodys.com. In addition, Moody's publishes a weekly summary of structured finance credit, ratings and methodologies, available to all registered users of our website, at www.moodys.com/SFQuickCheck.


Grandpa: The disconnect between actual fundamentals and the equity market are evident within the REIT world. IYR (REIT ETF) closed yesterday at $53.80 and is up 17% year to date. From 5/12/2009, IYR is up a staggering 62% while commercial vacancies, defaults and delinquencies continue to mount. And some say grandpa is a cynic??? The short squeeze continues and endorsed by both Ben Bernanke and Mary Schapiro.