The cumulative default rate for fixed-rate U.S. commercial mortgage-backed securities (CMBS) increased to 12.96% as of the first quarter of this year, a 25 basis point rise from year-end 2011, according to new data from Fitch Ratings.
There were 155 newly defaulted loans in the first quarter, creating a total of $1.7 billion. Office loans, which led defaults in 2011, continue to lead defaults in the first quarter with 49% by balance (48 loans). Retail loans made up the second-largest component of defaults with 29% by balance, but led by number of loans at 60.Â
The majority (139 of the 155) newly defaulted loans were less than $20 million, with only 14 loans greater than $25 million. The larger loans were predominantly office loans, with nine over $25 million. Fitch Ratings expects that the pace of new defaults in 2012 will be relatively stable to 2011 levels.