Commercial mortgage delinquencies continued to rise in December and will keep doing so this year, Moody's Investors Service Inc. said Friday.

Nick Levidy, a managing director at Moody's, said delinquencies in all property types and all regions surpassed previous highs in 2009. The rate could climb to between 8% and 9% by yearend, he added. It ended 2009 at 4.9%, up from 0.95% at the beginning of the year.

The commercial real estate market had held up better than the residential one until it began to deteriorate quickly at the end of 2008 as the recession deepened. Retail and hotel properties have been hit especially hard.

The delinquency rate rose 0.44 percentage point last month, the second-biggest increase of the year after November's 0.46-point jump.

The hotel industry posted the largest delinquency-rate increase in December, to 9.07%, from 7.8%. Multifamily delinquencies climbed to 8.14%, from 7.4% the previous month. And the delinquency rate for loans on retail properties rose to 4.52%, from 4.24%.

Moody's said delinquency rates continued to be highest in the South, at 7%, up from November's 6.27%. This was the region's largest increase on record. The East continued to be the best performing region, with a rate of 3.12%, up from 2.95%.

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