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CMBS Delinquencies Flat Following 15-Month Decline: Fitch

AUG 15, 2014 12:53pm ET
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After commercial mortgage-backed security delinquencies declined for 15 straight months, this streak came to an end in July.

Fitch Ratings said that CMBS delinquencies in July were unchanged, at 4.87%, compared to the month before. Since April 2014, CMBS delinquencies have dropped 276 basis points.

The Fitch Ratings delinquency index consists of 1,401 loans, totaling $19.2 billion, that are at least 60 days delinquent, in foreclosure, or bank-owned, the New York-based agency said.

Delinquencies on industrial properties improved the most from a month earlier down 51 basis points, to 5.27%, due to strong resolution volume. Conversely, hotels had the highest month-over-month delinquency rate increase of 17 basis points, up to 5.47%.

All the other major property types saw changes of less than 10 basis points, as the delinquency rate for multifamily, office and retail were 5.56%, 5.22% and 4.85%, respectively.

Fitch maintains a stable outlook on 84% of its CMBS portfolio. The remaining bonds are either considered distressed, 9%, while 7% have a negative outlook.

"Although the July rate was flat, CMBS delinquencies could fall at least another 10 basis points in the months ahead as properties listed on online marketplaces are sold," Fitch said. "Specifically, $415 million of assets in Fitch-rated deals have been widely reported as listed on Auction.com."

Fitch also reported that monthly loan resolutions of $462 million marked a post-recession low after averaging $1.3 billion per month over the last year. There was also $398 million of new delinquencies in July.

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