Delinquency rate on U.S. commercial mortgage-backed securities fell two basis points to 8.74% at the end of March, the first decrease since October 2010: Fitch
April 8, 2011
– The climb towards an expected 10% delinquency rate for U.S. CMBS has slowed, according to the latest index result from Fitch Ratings, which are featured in this week's U.S. CMBS newsletter.
Late-pays retreated two basis points (bps) to end March at 8.74%, representing the first decrease since October 2010 (when the Extended Stay America loan was resolved).
'Preliminary indications on year-end 2010 financials that have come in thus far are somewhat encouraging,' said Managing Director Mary MacNeill. 'Net operating income declines have slowed or reversed, which coupled with stronger market liquidity and new CMBS issuance should continue to help slow the rise in CMBS delinquencies going forward.'
Despite the slower pace, delinquencies, which declined across four of the five major property types last month, will likely continue to rise in 2011, albeit at a slower rate. Fitch has projected that the index will peak at roughly 10%.
Current delinquency rates by property type are as follows:
--Multifamily: 17.42% (from 17.58%);
--Hotel: 14.12% (from 14.33%);
--Industrial: 9.38% (from 9.40%);
--Retail: 6.89% (from 7.04%);
--Office: 5.95% (from 5.85%).
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