On the heels of another rise in U.S. commercial mortgage-backed security (CMBS) delinquencies, Fitch-rated loans in special servicing rose an additional 7.4%, according to Fitch Ratings.
Following a 54 basis point (bp) increase in Fitch's U.S. CMBS Loan Delinquency Index to 3.86, the balance of specially serviced loans in Fitch rated transactions increased to $35 billion in September from $32.6 billion in August.
The largest addition is the $217.4 million World Market Center loan in BSCMSI 2005-PRW10. The loan transferred to special servicing due to the borrower's inability to fund operating shortfalls at the 1.1 million square-foot Las Vegas furniture show room, an effect of declining occupancy due to the ongoing economic downturn, Fitch says.
While all property types continue to see performance declines, Fitch expects retail and hotel properties to see the immediate effects.
‘Hotel properties continue to be the most susceptible to current market stresses,’ says Senior Director Adam Fox.
SOURCE: Fitch Ratings