High Resolution Volume Drives CMBS Delinquency Rate Lower, Fitch Reports

(Illustration courtesy of Fitch Ratings)

The U.S. commercial mortgage-backed securities delinquency rate decreased nine basis points to 2.19% in March, according to Fitch Ratings, New York.

In a non-rating action commentary, Fitch said high resolution volume outpaced new delinquencies and “robust” new issuance. But while the overall delinquency rate dipped, the office delinquency rate increased nine basis points as a greater number of smaller office loans experienced term defaults in March.

The report said CMBS resolution volume increased to $1.1 billion in March from $894 million in February. Fitch-rated new issuance volume of $5.9 billion from seven transactions in February increased the index’s denominator.

New 60-plus-day delinquency volume totaled $789 million last month, down from $1.16 billion in February, Fitch said. Office loans accounted for 40% of new delinquencies at $316 million, followed by mixed-use at 23%, or $179 million, and retail at 20%, or $159 million. Multifamily accounted for just 7% of new delinquencies.

Fitch said term defaults accounted for 63%–$496 million–of new delinquencies while maturity defaults represented 37% at $293 million. “Approximately 4.0% of the Fitch-rated U.S. CMBS universe ($22.1 billion) was in special servicing as of the March remittance which compares with 3.9% ($21.4 billion) in February,” the report said.