California's commercial mortgage delinquency rate increased from 0.63% to 1.26% in the second quarter, according to the California Mortgage Bankers Association's (CMBA) latest Quarterly Commercial Loan Delinquency Survey. One year ago, the delinquency rate was 0.26%.
The CMBA survey found that 27 loans totaling $678.9 million were two or more payments past due. The survey includes 16 mortgage banking firms and $53.7 billion of commercial and multifamily loans.
Three of the past-due loans total $347.8 million, representing 51% of the total delinquent amount. The three loans consist of a $178.3 million loan on a retail property in Riverside County and two office building loans, for $85.7 million and $83.3 million, located in Alameda County and Orange County, respectively. Office buildings had the largest share of delinquencies – 15 loans totaling $424 million.
By number, the 27 loans represent 0.42% of the 6,412 loans surveyed. Nine of 16 participating companies reported zero delinquent loans, the CMBA says.
"The sluggish economy continues to weigh on commercial real estate" says Peter Ulrich, the CMBA's commercial real estate consultant. "California, in particular, has been hit hard, with a stubbornly high unemployment rate. The good news is that the delinquency rate is still very low on commercial loans, and our state is still a very attractive location."