NEW YORK--(BUSINESS WIRE)--A spate of dispositions from a single CMBS transaction resulted in the largest drop in U.S. CMBS delinquencies since the end of the recession, according to the latest monthly index results from Fitch Ratings.
CMBS late-pays fell 40 basis points (bps) last month to 6.78% (from 7.18% in June). Leading the fall were ORIX asset sales from the LB-UBS 2007-C2 transaction, which alone accounted for $759 million (in stated loan balance) of dispositions. Following these sales, the delinquency rate is now 2.23 percentage points below its July 2011 peak of 9.01%.
The ORIX sales helped drive delinquency rates for all major property types down last month. Delinquencies on office loans, a recent underperformer, stood out by falling nearly 60 bps month-over-month.
CMBS loans becoming delinquent also continued to diminish in size. The average loan size of new entrants in July was just $8.5 million, with only four loans over $25 million entering the index.
Current and previous delinquency rates are as follows:
--Industrial: 9.56% (from 9.77% in June);
--Hotel: 8.04% (from 8.35%);
--Office: 7.59% (from 8.18%);
--Multifamily: 7.41% (from 7.59%);
--Retail: 6.37% (from 6.74%).
Additional information is available in Fitch's weekly e-newsletter, 'U.S. CMBS Market Trends', which also contains recent rating actions and an overview of newly released CMBS research, including Fitch presales and Focus reports. The link below enables market participants to sign up to receive future issues of the E-newsletter: 'http://pages.fitchemail.fitchratings.com/CMBSMktOptin/'
Additional information is available at 'www.fitchratings.com'.