With loans secured by office buildings leading the way, the rate of past-due payments on securitized commercial real estate loans rose last month.
As of July 31, the 30-day delinquency rate on loans that are included in commercial mortgage-backed securities worked out to 2.96 percent.
CMBS loan performance worsened compared to the prior month, with the 30-day delinquency rate climbing 10 basis points from the end of June.
But delinquency has improved substantially from July 31, 2015, when the rate was 3.62 percent.
The performance statistics were reported by Morningstar Credit Ratings LLC, which rates $795.4 billion in CMBS.
The month-over-month deterioration was attributed to
a declining payoff rate for maturing loans.
“Morningstar Credit Ratings LLC expects the maturity payoff rate to continue to slide and drive the delinquency rate higher, as many of the loans coming due this year were written in 2006 under overly optimistic cash flow projections that never materialized,”
the New York-based ratings agency stated.
Leading the increase in delinquency from June were securitized office building loans, with the 30-day rate soaring 54 basis points to 5.98 percent.
Delinquency on retail property CMBS loans jumped 16 BPS to 5.27 percent as of last month.
A 6-basis-point month-over-month increase left the 30-day rate at 2.50 percent on healthcare property loans included in CMBS.
The rate on multifamily properties dipped a basis point from June to 0.58 percent.
At 4.32 percent, the 30-day rate on industrial property loans retreated 11 BPS in July.
Securitized hotel loan delinquency fell 13 BPS to 2.89 percent as of July 31.
