New York, December 13, 2010 -- The delinquency rate on loans included in US Commercial Mortgage-Backed Securities (CMBS) conduit/fusion transactions increased 24 basis points in November to 8.63%, according to Moody's Investors Service's Delinquency Tracker (DQT). The increase was larger than the 15 basis point increase in October, but continued a trend of moderate increases that has prevailed over the second half of the year.
In November, 294 loans became newly delinquent, while 245 previously delinquent loans became current, worked out, or disposed.
"As has been the case in recent months, the resolution and liquidation of troubled loans has helped to largely offset the increase in delinquent balance," said Moody's Managing Director Nick Levidy.
In all, the total number of delinquent loans increased in November to 4,091, and the total balance of delinquent loans increased by approximately $1.1 billion to $53.8 billion.
Year-to-date, the Moody's Delinquency Tracker has risen 373 points. Though the largest basis point increase since May, November's 24 basis point rise was still significantly below the average monthly increase of over 50 basis points that occurred during the first five months of the year.
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.
The office sector had the greatest increase in delinquency rate among the five core property types in November, gaining 44 basis points to 6.72%. During the month, $1.2 billion in office loans became newly delinquent and only $455 million became current, worked out or disposed.
The other sectors saw moderate increases in delinquency or were essentially flat.
Retail properties saw the next highest net increase after offices, an increase of 27 basis points to 7.14%.
Industrial properties had a 13 basis points increase to the delinquency rate, its delinquency rate stands at 6.36%. Industrial remains the best performing of the five property types.
Multifamily also experienced a modest increase in its delinquency rate, ending November at 13.90%, a 13 basis point increase since October.
The hotel loan delinquency rate remained essentially flat in November, increasing only three basis points. The hotel delinquency rate remains the highest among the major property types at 16.42%.
By region, the Midwest had the best performance of the four regions covered by Moody's Delinquency Tracker in November. In the Midwest, the delinquency rate fell six basis points to 8.57%.
The South saw the largest increase in its delinquency rate in November, rising 67 basis points during the month to end at 10.86%, the highest delinquency rate among the regions.
The West posted the second largest increase, as its delinquency rate rose 34 basis points to 9.70%, more than double the rate a year ago.
The East had essentially no change in its delinquency rate, rising only one basis points to 6.60%.
By State, Nevada continues to have the largest delinquency rate by a very large margin. Its delinquency rate rose another 31 basis points to stand at 27.50%. With a jump in its delinquency rate of over 700 basis points, Alabama has surpassed Michigan as the second worst performing state, with a delinquency rate now of 18.81%. Michigan's rate dropped 45 basis points in November to 14.43%. Moody's Announcement
November 2010 Delinquency Rate Recap
- Overall 8.63%
- Office 6.72% (up 90% YTD)
- Retail 7.14% (up 36% YTD)
- Industrial 6.36% (up64% YTD)
- Multifamily 13.90% (up 58% YDT)
- Hotel 16.42% (up 67% YTD)
A Trip Down Memory LaneDecember 2009 Delinquency Rate Recap
- Overall 4.9%
- Office 3.19%
- Retail 4.52%
- Industrial 3.42%
- Multifamily 8.14%
- Hotel 9.07%