U.S. commercial mortgage-backed securities (CMBS) delinquencies closed out 2012 with seven straight months of declines, according to the latest index results from Fitch Ratings.
CMBS delinquencies fell 18 basis points (bps) last month to 7.99% from 8.17% a month earlier. In December, resolutions of $1.7 billion outpaced additions to the index of $1 billion.
CMBS delinquencies started out 2012 at 8.37%. After climbing to 8.65% in May, the rate has steadily fallen ever since. Fitch Ratings expects the index to remain ‘somewhat volatile’ in 2013 and end the year closer to 7.5%.
Despite having the highest rate of all property types, multifamily delinquencies dropped the most of any major property type in 2012. The multifamily rate began the year at 14.42% and fell 430 bps to close out the year at 10.12%. The second most-improved sector in 2012 was hotels, which began the year with delinquencies of 12.02% and finished 315 bps lower at 8.87%. Industrial delinquencies ended last year 164 bps lower at 8.61%, down from 10.25%.
Office loans were the poorest performers last year: the sector began 2012 at 6.84% but rose 157 bps to close out the year at 8.41%. Retail also ended 2012 in worse shape than it started: the sector began the year at 6.89% and finished the year 25 bps higher at 7.14%.