Like Getting Stomped to Death by a Duck is a terrible analogy, but that is what it feels like each month as we report on the seemingly upward-only path of commercial mortgage-backed securities (CMBS) delinquencies.
According to Fitch, the 60-day delinquency rate reached 8.59% as of January 31, 2011 as compared to 8.23% a month earlier, and 6.00% as of a year earlier (ouch)! Fitch tracks the performance of approximately 38,000 loans valued at approximately $416 billion.
Got “rescue capital” looking for a “home”? Then follow the road map (chart) below which shows the percentage of loan balances by property sector in Fitch-rated CMBS offerings which are delinquent at least 60 days or in foreclosure, thereby “ranking” the location of opportunities.
Percentage of Loan Balances, by Property Sector, in Fitch-Rated CMBS Offerings Which are at Least 60 Days Delinquent or Which are in Foreclosure:
Property Sector |
January 2011 (%) |
December 2010 (%) |
January 2010 (%) |
Multifamily |
17.40 |
15.63 |
8.33 |
Hospitality |
14.43 |
13.99 |
16.44 |
Industrial |
8.53 |
6.24 |
3.73 |
Retail |
6.88 |
7.20 |
4.94 |
Office |
5.50 |
5.69 |
3.06 |
Overall |
8.59 |
8.23 |
6.00 |
Source: Fitch. |
Too oblique? Look for multifamily deals with financial problems followed by hospitality, industrial, then retail, and then office.