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15 Mar 2011
New York, March 15, 2011 -- The delinquency rate on loans included in US Commercial Mortgage-Backed
Securities (CMBS) conduit/fusion transactions increased 17 basis points
in February to 9.18%, according to Moody's Investors
Service's Delinquency Tracker (DQT). The performance continued
a trend of moderate increases that began in June 2010.
"As the specially serviced loan rate is 3.3% above
the delinquent loan rate, this signals that further increases in
the delinquency rate are to be expected," said Tad Philipp,
Director of Commercial Real Estate Research.
As the year goes on, Moody's expects the addition of new loans
to the Tracker to suppress the delinquency rate. All current,
the new loans will add to the loan total, lowering the percentage
that are delinquent through what is called the "denominator effect."
During February loans totaling $4.1 billion became newly
delinquent, while previously delinquent loans totaling approximately
$3.0 billion became current, worked out, or
disposed of. In all, the total number of delinquent loans
increased to 4,112 in February from 4,052 in January,
and the total balance of delinquent loans increased to $56.8
billion from $55.7 billion.
Moody's Delinquency Tracker (DQT) tracks all loans in US conduit and fusion
deals issued in 1998 or later with a current balance greater than zero.
Looking at the five property types, the delinquency rate for hotels
fell for just the third time in two years in February. During the
month, the sector's delinquency rate fell 34 basis points
to 16.41%. In February only 20 hotel loans totaling
$333 million were newly delinquent, while over $500
million in hotel loans became current, were worked out or disposed.
Increasing 33 basis points during February to 15.92%,
the delinquency rate of the multifamily sector is almost as high as that
of the hotel sector. During February 68 multifamily loans totaling
$665 million became newly delinquent, while 61 loans,
totaling $447 million, became current.
The industrial sector saw the greatest gain in its delinquency rate in
February, which increased 113 basis points to end the month at 10.26%.
A total of $399 million of industrial loans became delinquent during
the month, while $74 million in these loans became current,
were worked out or disposed.
Retail was the only property type other than hotels to record a decline
in its delinquency rate in February, as the rate dropped two basis
points to 7.25%.
Office loans remain the best performing of the five property types,
although the office loan delinquency rate grow 34 basis points during
February to 6.77%. During the month there were $1.37
billion of newly delinquent office loans, which led to a $652
million net increase in the total balance of delinquent office notes.
By region, the East saw the biggest increase in its delinquency
rate in February, as the rate rose 44 basis points during the month
to 7.16%. Three of the four biggest newly delinquent
loans were in the East.
The increase in the delinquency rate in the Midwest closely matched that
of the United States as a whole. During the month, the Midwest
delinquency rate rose 17 basis points to 9.21%.
The South saw a marginal, four basis point increase in its delinquency
rate in February, the rate ending the month at 11.01%.
The West saw a 26 basis point drop in its delinquency rate, to 9.48%,
the second decline in two months. Declines specifically in the
office and hotel delinquency rates largely led to the improvement.
By state, Montana saw a dramatic 482 basis point climb in its delinquency
rate to 7.87%. Moody's points out that the
large increase resulted solely from one newly delinquent loan because
Montana contributes such a small number of loans to the DQT.
Nevada continues to have a nearly 30% delinquency rate, close
to twice as high as any other state.
The report "US CMBS: Moody's CMBS Delinquency Tracker, March
2011," is available on Moodys.com. In addition,
Moody's publishes a weekly summary of structured finance credit,
ratings and methodologies, available to all registered users of
our website, at www.moodys.com/SFQuickCheck.
* * * * *
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New York
Tad Philipp
Senior Vice President
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Edward Siegel
Asst Vice President - Analyst
Structured Finance Group
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Moody's: US CMBS Loan Delinquencies Rise to 9.18%
No Related Data.
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