Increased loan resolutions have helped lead to a third-straight month of declines for U.S. commercial mortgage-backed securities (CMBS) delinquencies, according to the latest index results from Fitch Ratings.
CMBS late-pays fell 9 basis points (bps) last month to 8.39% from July's reading of 8.48%; Fitch Ratings attributes the decline to the volume of loan resolutions outnumbering the volume of new delinquencies. In August, approximately $2 billion of loans were resolved and removed from the index compared to $1.7 billion of new delinquencies added to the index.
However, Fitch Ratings warns that office sector delinquencies ‘remain an area of concern,’ with delinquencies increasing 29 bps. Thirty-four office loans totaling $829 million became newly delinquent in August, while 37 loans totaling $494 million were resolved.
The retail delinquency rate also worsened, but only by 3 bps. New delinquencies were nearly offset by resolutions as 48 loans totaling $538 million became newly delinquent, compared to 44 loans totaling $536 million resolved.
Fitch Ratings adds that the hotel sector's delinquency rate improved 64 bps with the resolution of 17 loans totaling $372 million, compared to nine loans totaling $126 million becoming newly delinquent. The multifamily delinquency rate improved by 71 bps with the resolution of 29 loans totaling $508 million, compared to 24 loans totaling $116 million becoming newly delinquent.