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Thursday, January 13, 2011

CMBS Delinquencies up a mere 79% in 2010 (Moody's)

Wall Street Journal
By Matt Jarzemsky, Dow Jones Newswires

Delinquencies on loans in U.S. commercial mortgage-backed securities, or CMBS, rose for the seventh-straight month in December, Moody's Investors Service said.

Last month's 8.79% rate was up from 8.63% in November and 4.9% at the end of 2009. Loans soured rapidly early last year but the growth in delinquencies moderated in the second half.

Commercial real estate has been pummeled as reduced occupancy rates and rents have put pressure on property owners, often causing them to fall behind on interest payments. Meanwhile, tightened credit standards and sharply lower property values have made it harder for landlords to refinance or sell buildings to repay maturing loans.

"The rate of newly delinquent loans is likely to continue moderating in the coming year as capital markets continue to heal and the flow of loans into special servicing slows," Moody's Managing Director Nick Levidy said.

In December, the total balance of delinquent loans increased by $1.1 billion to $54.9 billion.

Hotels again had the highest delinquency rate, at 16.37% for December, but were also the most-improved asset class as that was 0.05 percentage point lower than a month earlier. Industrial had the lowest rate, at 6.54%.

All four U.S. regions saw delinquency rates increase modestly. The South had the highest rate, at 11%. The best-performing region was the East, at 6.7%.

More from Housing Wire
The number of delinquencies within the conduit/fusion space of commercial mortgage-backed securities rose 79% in 2010, ending December at 8.79% up from 4.9% a year earlier, according to Moody's Investors Service.

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