Delinquencies rise for CMBS in March

Commercial mortgage-backed securities experienced a slight rise in its delinquency rate.

Property management companies working with loans in commercial mortgage-backed securities experienced an increase in the delinquency rate during March.

The total delinquency level rose to 9.5 percent, a total of eight basis points higher than one month earlier, according to a report from Trepp. Even with the jump, the figure was more than 80 basis points lower than the highest level ever recorded, which was in July 2012.

Hotels experienced the highest CMBS delinquency rate increase, as the figure was 11.82 percent in March compared to the previous month's 10.08 percent, Trepp's 2013 U.S. CMBS Delinquency Report explained. The sector with the most elevated overall rate was the multifamily market, which had a level of 12.73 percent. Retail experienced the smallest figure, as it was 7.91 percent, and the office market was the second-lowest, with a level of 10.6 percent.

"A close examination of the data reveals that the weakening experienced in March is not nearly as worrisome as it seems," said Manus Clancy, senior managing direction of Trepp. "The jump in the rate was caused primarily by a reversal of status of a number of floating rate hotel loans."

Meanwhile, loan resolutions declined in March, as the figure fell to approximately $850 million from nearly $1 billion the previous month, the report noted. More than $52 billion of these loans were delinquent for more than one month, while close to $2.8 billion in CMBS loans became delinquent in the month.

More than 3,000 CMBS loans were in some stage of special servicing, the report added. This figure came out to a dollar amount that approached $65 billion.

Commercial mortgage delinquencies fall to end 2012
Even with a slight increase in the level of CMBS loan delinquencies, there was still strong progress made in these declines across multiple different types of loans.

Overall delinquencies of two months or more for loans held by life companies fell to 0.08 percent during the fourth quarter, according to the Commercial/Multifamily Delinquency Report from the Mortgage Bankers Association. This was 0.04 percentage points lower than the previous quarter's level.  Loans delinquent 90 days or more and held by banks dell to 2.62 percent, which was more than 0.3 percentage points lower than in the third quarter. Additionally, the level of Freddie Mac-held multifamily loans dropped to 0.19 percent, nearly 0.2 percentage points lower.

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