Deteriorating late payments on office building loans led delinquency higher on overall securitized commercial real estate loans.
Delinquency of at least 30 days on loans behind commercial mortgage-backed securities was 2.91 percent as of May 31.
Past-due CMBS loans accounted for a larger share of the overall CMBS population than compared to April’s 2.81 percent.
Those details were delivered by Morningstar Credit Ratings LLC based on $774 billion in CMBS that it tracks.
The New York-based ratings agency said that rising CMBS delinquency was affected by by a declining payoff rate for CMBS loans.
It “expects the maturity payoff rate will continue to slide and affect the delinquency rate as many of the loans coming due this year were written in 2006 under overly optimistic cash flow projections that never materialized.”
Despite the up tick in the 30-day rate, CMBS delinquency has improved significantly from 3.65 percent as of May 31, 2015.
CMBS loans secured by office buildings saw delinquency surge 41 basis points from the last report to 5.39 percent as of May 31, 2016.
Delinquency on securitized industrial property loans jumped 12 BPS from April to 4.40 percent.
An 8-basis-point month-over-month rise put hotel delinquency at 2.78 percent.
On multifamily loans, the rate of late payments was up 4 BPS to 0.65 percent.
At 4.99 percent, the delinquency rate on securitized retail property loans was 2 BPS worse than at the end of April.
Healthcare was the only sector to see a month-over-month improvement, falling 3 BPS to 2.46 percent.
