Fitch: Overall, Monthly CMBS Late Pays Are Lower

Commercial mortgage-backed securities delinquencies declined by nine basis points in August when compared to July, but conduit loans backed by office properties remain a problem, according to Fitch Ratings.

The CMBS delinquency rate fell to 8.39% from 8.48% in July, as in August, approximately $2 billion of loans were resolved and removed from the index compared to $1.7 billion of new delinquencies added to the index.

In a sign of the problems in the office sector, the largest addition to Fitch’s index is the $678 million Skyline Office Portfolio in Falls Church, Va. This loan contributed to office delinquencies rising 29 bps to 8.72%. A potential loan modification is currently being discussed, the rating agency added.

Retail conduit loan delinquencies increased three basis points in August, but was still the best performing as a group at 7.43%

All other categories saw strong improvement in performance. While hotel properties have the highest delinquency rate in August at 10.82%, this is still a 64 bps improvement. The improvement among multifamily loans was even bigger, 71 bps to 10.18%.

There was a 14 bps improvement in industrial CMBS performance to 8.54%.