Delinquencies on commercial mortgage-backed securities continued to climb last month on a combination of large-loan defaults and worsening performance at multifamily and retail properties, Fitch Inc. said Monday.
The total monthly delinquency rate rose 19 basis points from April, to 2.07%, the highest percentage since Fitch began compiling the data in 2001. The data mirrors a report Moody's Investors Service Inc. issued last week.
Fitch said the multifamily delinquency rate was the highest of all property types, at 4.55%, as a result of declining performance, especially in markets with excess supply.
Delinquencies of 60 days or more for the retail sector were slightly higher than the overall figure at 2.24%, with a combined value of $3.1 billion, Fitch said. The figure is expected to keep rising as consumer spending continues to tighten and retail properties continue to lose tenants, the agency said.
Retail loans overdue by 30 days or more jumped 30%, to $1.1 billion. The delinquent mortgages include 19 loans or cross-collateralized property portfolios with balances of $50 million or more, and eight of them had balances above $100 million, Fitch said. A year earlier only two such loans had a balance of $50 million or more.
Two of the 10 largest delinquent loans were added in May, and both of them were originated in 2007 as the real estate market peaked.
Delinquencies on loans backed by hotels remained below the average, at 1.91%, but Fitch said defaults could rise precipitously as occupancy and revenue per available room continue to sour.