NEW YORK--(BUSINESS WIRE)--U.S. CMBS delinquencies posted the largest month-over-month decline in the overall rate since Fitch Ratings started its index 15 years ago, according to Fitch Ratings in its latest weekly U.S. CMBS newsletter.
The large drop came as no surprise as the Peter Cooper Village and Stuyvesant Town asset payoff was reflected in the latest remittance information. Loan delinquencies fell 109 basis points (bps) in January to 2.93% from 4.02% at year-end 2015. The last time delinquencies were below 3% was in June 2009.
Fitch expects the delinquency rate to fluctuate between 2.50% and 3% during the year. The primary reason is that maturity defaults on 2006-vintage loans, primarily those that are highly leveraged and are weaker performing, are expected to increase and liquidations of already delinquent assets are expected to continue. January resolutions of $4.8 billion overwhelmingly outpaced new delinquencies of $637 million. By balance, nearly 95% of total resolutions were REO liquidations, largely from the payoff of the Peter Cooper Village and Stuyvesant Town asset.
Rates declined for all property types; Current and previous delinquency rates are as follows:
--Retail: 4.96% (from 5.20% at YE 2015);
--Office: 3.82% (from 4.61%);
--Hotel: 3.41% (from 3.82%);
--Multifamily: 0.82% (from 4.19%);
--Industrial: 3.38% (from 3.88%);
--Mixed Use: 2.57% (from 2.73%);
--Other: 0.90% (from 0.89%).
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/'
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