With a little help from favorable performance on multifamily loans, the past-due rate on securitized commercial real estate loans managed to decline despite an increase in corresponding delinquent loan balances. Delinquency on hotel loans, however, deteriorated by 120 basis points.
As of the end of last month, $52.83 billion in loans contained in commercial mortgage-backed securities were delinquent at least 30 days.
Past-due CMBS loans increased from $52.14 billion as of Feb. 28. But the level of distressed loans has fallen from a year earlier, when $59.18 billion in securitized CRE loans were in default.
The findings were based on CMBS rated by Morningstar Credit Ratings LLC.
Despite the uptick in the dollar amount of delinquent CMBS loans, the 30-day rate fell to 7.202 percent as of March 31 from 7.228 percent at the end of the prior month.
The inverse movements reflect an increase in CMBS rated by the ratings agency — to $733.60 billion last month from $721.42 billion as of Feb. 28.
“The movement in both delinquent unpaid balance and percentage continues to be impacted by the size and amount of loan liquidations, modifications, extensions and resolutions reported on a monthly basis,” the report stated. “These items, along with continued new issuance growth, should lead to a further decline in delinquency levels throughout 2013.”
CMBS delinquency was 8.258 percent as of March 31, 2012.
Morningstar said that the lowest level ever for CMBS delinquency was 0.283 percent in June 2007.
The biggest drop in delinquency was with healthcare CMBS, with the 30-day rate plunging to 6.1 percent last month from 12.4 percent in February.
However, the healthcare rate is more volatile since Morningstar only rates around $0.18 billion in CMBS loans secured by healthcare properties.
A larger impact was made on the overall rate by multifamily delinquency, which fell to 4.3 percent from 4.7 percent as of Feb. 28.
March’s delinquency rate was 7.2 percent for retail property loans, 10.0 percent for office property loans and 11.7 percent for industrial property loans. All three categories were unchanged from February.
The only category to see deterioration was the hotel property category, with hotel loan delinquency jumping to 9.2 percent from 8.0 percent.
