Mall Sale Reduces September CMBS Delinquency Rate

Fitch Ratings’ commercial mortgage-backed securities delinquency rate declined 11 basis points in September due to the selling of larger real estate owned assets and their removal from loan pools.

The index is at 6.57%, down from 6.68% a month earlier. Fitch says the drop was led by the sale of the Granite Run Mall. Meanwhile the sale of another large troubled asset appears imminent, namely Gwinnett Place in Duluth, Ga., and that should also positively affect the CMBS delinquency rate.

Granite Run, located in Media, Pa., was purchased by Bruce Toll, the vice chairman of homebuilder Toll Brothers, according to various media reports.

“CMBS delinquencies will continue to move lower as assets become REO and are disposed of. In fact, the percentage of REO assets in Fitch’s delinquency index exceeded 50% for the first time in the index’s history last month. This compares to 37% one year ago,” states Mary MacNeill, managing director.

There are improvements in the delinquency rate among all types of properties securing conduit loans. Industrial delinquencies are at 9.57% from 9.41% in August; hotel, 7.52% from 7.68%; office, 7.41% from 7.56%; multifamily, 6.95% from 7.3%; and retail, 6.11% from 6.23%.