Moody's: Small-Town Blues for CMBS

The smaller the town, the greater the chance a commercial mortgage loan will become delinquent, according to Moody's Investors Service.A Moody's study found that commercial mortgages from towns too small to be designated as a metropolitan statistical area have more than five times the likelihood of becoming delinquent as loans from MSAs. Conversely, delinquencies in commercial mortgage-backed securities are generally lowest in larger cities. In fact, the 10 largest cities had a delinquency rate of 0.7% in CMBS transactions, while towns too small for MSA classification had an average delinquency rate of 3.8%. "This pattern prevails across all property types," said Sally Gordon, a Moody's analyst and author of the report. Moody's can be found online at http://www.moodys.com.