Performance on securitized commercial real estate loans worsened for the second consecutive month, and the outlook is for more deterioration.
As January concluded, delinquency of at least 30 days on loans that are included in commercial mortgage-backed securities was 3.01 percent.
The past-due CMBS rate inched up from 3.00 percent as of year-end 2016. It was the second month in a row that the delinquency rate worsened.
But the 30-day rate was lower than 3.09 percent as of Jan. 31, 2016.
Morningstar Credit Ratings LLC reported the performance metrics based on the $783 billion in CMBS it rates.
The ratings agency said it expects delinquency to deteriorate this year due to
a surge in the volume of newly delinquent CMBS loans, many which will default at or near maturity.
“With many of the maturing loans over-leveraged and lenders being more conservative, we expect the maturity payoff rate to fall, because loans issued in 2007 were often originated under more aggressive terms than those in 2006,” the report stated. “We project that only about 60 percent of the nondefeased loans coming due in 2017 will be able to refinance, down from 75.6 percent in 2016.”
Delinquency on securitized industrial property loans was 4.91 percent as of Jan. 31, 2017, jumping from a month earlier by 27 basis points — the worst month-over-month deterioration of any property type.
A 12-basis-point increase from December 2017 left the rate on multifamily CMBS loans
at 0.56 percent.
At 6.33 percent, delinquency
on office building loans worsened 9 BPS from year-end 2016.
Healthcare property delinquency crept up 2 BPS to 1.98 percent as of January 2017.
A 1-basis-point rise on securitized hotel loans placed the 30-day rate at 3.00 percent as of last month.
The only property type to experience an improvement last month was retail: 20
BPS to 5.58 percent.
