Improvement in the performance of hotel loans was behind the overall decline in the delinquency rates of commercial real estate loans, Mortgage Daily reported Sept. 25. However, industrial properties did not fare as well.
Using data from Morningstar Research, Mortgage Daily reported that the 30-day delinquency rate on commercial mortgage-backed securities fell to 8.288 percent in August, down from 8.449 percent in July. However, the delinquency rate increased year-to-year; it was 8.064 percent in August 2011.
The data suggested the possibility that delinquency rates could reach 9 percent heading into 2013 because many loans are facing maturity and take-out financing may not readily be available to them. Morningstar data also noted that special servicers could deny requests for extensions, modifications and debt restructuring, and they expressed concern that borrowers could simply surrender collateral, Mortgage Daily reported.
In terms of performance, the hotel loan delinquency rate showed the greatest improvement, with a 30-basis-point drop from July to August and an 11 percent delinquency rate.
Past-due payments on office property loans and multifamily loans both saw a 20-basis-point improvement, falling to 10.1 percent and 6.4 percent, respectively.
However, delinquency rates on retail property loans increased 10 basis points to 7.7 percent in August, while industrial properties represented the highest rate of delinquency, jumping to 11.1 percent in August from 10.7 percent in July.
The Morningstar report indicated that a total of $58.59 billion in CMBS loans were delinquent in August, a decline from the $60.06 billion in past-due commercial mortgages in July. A year earlier, $58.92 billion in securitized CRE loans were delinquent.
Morningstar evaluated a total of $706.95 billion in CMBS as of August, less than both the $710.82 billion it rated as of July and the $730.7 billion it rated in August 2011.