The US CMBS delinquency rate remained largely stable last month amid a high volume of new delinquencies and resolutions, according to the latest index results from Fitch Ratings.
CMBS delinquencies fell two basis points (bps) in August to 4.85% from 4.87% a month earlier despite the highest volume of changes to the index since March of this year. Resolutions rebounded strongly last month to $1.075 billion after hitting a post-recession low of $462 million in July. However, August also marked a comeback of new delinquencies, which hit $1.082 billion and represented the largest volume of new delinquencies since February 2013.
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Although new delinquencies slightly exceeded resolutions in August, the overall rate moved modestly lower due to an increase in the index denominator. Fitch-rated new issuance volume of $4.3 billion outpaced $3.5 billion in portfolio runoff. The new issuance also helped offset significant jumps in late-pays for two property types.
Delinquencies on retail CMBS, long the lowest delinquency rate of the major property types, soared by 49 bps. The primary reason was $722 million in new retail delinquencies, which far surpassed last month’s $272 million in resolutions. Hotel also saw a big jump in its rate, moving 41 bps higher, due to $123 million in new delinquencies outpacing just $22 million in resolutions.
Current and previous delinquency rates are as follows:
–Hotel: 5.88% (from 5.47% in July);
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By GlobalData–Multifamily: 5.52% (from 5.56%);
–Retail: 5.34% (from 4.85%);
–Office: 5.17% (from 5.22%);
–Industrial: 5.15% (from 5.27%).
