S and P 500 REIT IYR up 18% Year To Date
while CMBS delinquencies continue rising.
NEW YORK--(BUSINESS WIRE)--The reprieve in delinquency increases was short-lived as U.S. CMBS late-pays resumed their climb this past month, according to the latest delinquency index results from Fitch Ratings. The full results are featured in this week's U.S. CMBS newsletter.
Delinquencies rose 18 basis points (bps) to finish November at 7.96%. Driving the increase was $1.6 billion of new defaults on office-and retail-backed loans.
'Office and retail properties fared well during the recession due to generally longer-term lease agreements, but they are now most vulnerable to asset-specific performance declines for the same reason,' said Managing Director Mary MacNeill. 'As office leases originated at the peak of the market come up for renewal, they will be marked down to lower market rents, pressuring operating income.'
Current delinquency rates by property type are as follows:
- Multifamily: to 14.75% (from 14.57%);
- Hotel: to 14.27% (from 14.14%);
- Retail: to 6.55% (from 6.25%);
- Industrial: to 6.01% (from 5.83%);
- Office: to 5.63% (from 5.38%).
December 1, 2010 CMBS Delinquency Data Recapped
on Housing WireThe delinquency rate on loans backing commercial mortgage-backed securities jumped to the second highest rate on record in November, up 35 basis points to 8.93%, according to a monthly report released by Trepp analytics firm.
A total of $60.3 billion in CMBS loans are delinquent. Of the nearly 9% that are delinquent, most (2.92%) are more than 90 days past due.
November's CMBS delinquency rate is second only to September's rate of 9.05%. The delinquency rate in November 2009 was 5.65%. The rate in October dipped down to 8.58% boosting analysts' anticipations delinquencies would continue to fall. Now they are not so confident.
"We frequently pointed out that as servicers became more adept at processing troubled loans, the delinquency rate would continue to see downward pressure," the Trepp report said. "The November numbers throw cold water on the enthusiasm that's built up over the last six months."
Delinquencies for loans on multifamily properties spiked in November, making it the worst performing sector for the first time in more than a year. The delinquency rate now stands at 15.8%, up from 14.6% in October and up from 8.8% one year ago.
The lodging sector of CMBS fell to 14.6% from 14.9% in October, but still maintains the second highest rate, followed by the retail sector (7.6%), the office sector (7%) and the industrial sector (6.6%). Housing Wire Site for More Real Estate Information