Fitch: Strong New Issuance Drives CMBS Delinquency Rate Lower

(Stock commercial real estate illustration courtesy of Jan van der Wolf via Pexels)

Fitch Ratings, Chicago, reported that the overall U.S. commercial mortgage-backed securities delinquency rate decreased 5 basis points in January to 3.32%.

“While new delinquencies outpaced resolution volume, robust new issuance drove the overall rate lower in January,” Fitch said in a non-rating action commentary. “Issuance activity rose sharply, with 20 new transactions totaling $20.0 billion in December, compared with eight transactions totaling $6.3 billion in November.”

The report said new 60-plus day delinquency volume totaled $1.75 billion in January, down from $2.08 billion in December. Office had the highest proportion and dollar volume of delinquencies (38%; $669 million), followed by multifamily (32%; $558 million), mixed-use (6%; $97 million) and hotel (11%; $191 million).

Fitch noted maturity defaults accounted for 64% ($1.11 billion) of new delinquencies; term defaults accounted for 36% ($640 million).

“Resolution volume increased to $1.46 billion in January from $1.36 billion in December,” the report said. “Total January resolutions included $834 million of loans brought current, $548 million of loan liquidations, and $82 million of loans previously 60+ days delinquent removed from Fitch’s index that are now 30 days delinquent.”

Special servicing volume for the Fitch-rated U.S. CMBS universe as of the January remittance was 6.1% ($37.9 billion), compared to December’s 6.3% and $38.2 billion. The report said the office special servicing rate decreased slightly to 15.2% in January from 15.5% in December.