Fitch Ratings said that the climb toward an expected 10% CMBS delinquency rate has slowed based on its latest index result.
Late-pays were two basis points less to end March at 8.74%, which represented the first dip since October 2010. This was when the Extended Stay America loan was resolved.
"Preliminary indications on year-end 2010 financials that have come in thus far are somewhat encouraging," Managing Director Mary MacNeill said. "Net operating income declines have slowed or reversed, which coupled with stronger market liquidity and new CMBS issuance should continue to help slow the rise in CMBS delinquencies going forward."
Despite the slower pace, delinquencies, which declined across four of the five major property types last month, will probably continue to rise in 2011, although at a slower rate. Fitch has projected that the index will peak at roughly 10%.
Current delinquency rates by property type: Multifamily: 17.42% (from 17.58%); Hotel: 14.12% (from 14.33%); Industrial: 9.38% (from 9.40%); Retail: 6.89% (from 7.04%) and Office: 5.95% (from 5.85%).
