Commercial mortgage delinquencies surged in November as a number of loans backed by retail properties fell behind on payments, Fitch Inc. said Friday.
The share of loans tracked by Fitch that are at least 60 days past due jumped 13 basis points from October, to 0.64%, with 29 retail loans totaling $397 million falling behind, the rating agency said.
The delinquent loans included a $137.2 million one backed by a mall and a $73.6 million mortgage backed by retail properties. The borrower for both loans is Lightstone Group, the debt-laden company that may lose Extended Stay Hotels Inc. because of tumbling cash flow.
Susan Merrick, Fitch's head of U.S. commercial mortgage-backed securities, said that while all types of properties pose a risk next year because of the deepening recession, the retail and hotel sectors pose the greatest concern because of their heavy reliance on consumer spending, which has fallen off sharply.