Delinquencies on commercial property loans soared in the first quarter as rising vacancies and credit contraction made loan refinancing difficult, Standard & Poor's Corp. said Monday.

The percentage of commercial loans that paid off at maturity in the first quarter decreased to 55%, from 83% in the fourth quarter, S&P said.

The loss rate for delinquent loans liquidated in the quarter doubled, to 48%.

"Until liquidity returns to the commercial real estate sector, we expect above-average loss severities to continue," said Larry Kay, an S&P credit analyst, wrote in a report.

The delinquency rate for bonds backed by commercial mortgage payments is now 1.85%, or 11 basis points below the record, the report said.

S&P said it issued 326 downgrades in the first quarter to commercial mortgages bundled and sold as bonds.

"The bulk" of the downgrades were for bonds backed by loans made from 2005 to 2007, according to the report.

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