Moody’s released the latest stats from its CMBS “delinquency tracker” on Monday, and according to the rating agency, the average rate of delinquencies on US CMBS conduit and fusion loans rose by 21 basis points in August to 3.23 per cent.
But it’s not the August increase that’s noteworthy: the tally was a mere 0.5 per cent a year ago and is now more than 300bp above the low of 0.22 per cent measured in July 2007, Moody’s said.
If you’re looking for positive news, the second derivative provides a bit: the 21bp increase in August was “less than the average monthly increase of 32 basis points in the six-month period from March 2009 to August 2009.”
Still, even Moody’s is wary about reading too much into the data (emphasis FT Alphaville’s):
“Although the rate of increase has tapered off in the past two months, it is much too early to count on this trend continuing,” says Moody’s Managing Director Nick Levidy. “In fact, we expect that the monthly change in the delinquency rate will resume an upward trend over the next several months as troubles compound in the commercial real estate sector.“
Here’s more from the statement:
Of the five core property types tracked by Moody’s DQT, the multifamily sector continues to have the highest delinquency rate. In August delinquencies for this sector were at 5.51%, an increase of 51 basis points since July.
After two months of posting leaps in delinquencies of over 100 basis points, the hotel sector saw its delinquency rate decline in August by 51 basis points to 4.18%.
Retail properties had a 22 basis point increase in delinquencies during August, raising the rate to 3.41%. Half of the ten largest currently delinquent loans are backed by retail properties.
Office and industrial both had a 21 basis point increase in delinquencies in August. The office delinquency rate is now 2.01%, the lowest among the five sectors. Office properties, however, generally have long-term leases so the sector’s delinquencies often lag those of the other property types.
Industrial properties are the second best performing property type, with a delinquency rate of 2.46%.
And here’s a chart showing total delinquencies as a per cent of the outstanding balance on CMBS conduit and fusion loans from 2001-2009:
Related links:
CMBS resecuritisation, datapoint du jour – FT Alphaville
US CMBS delinquencies could exceed 5% by year end – FT Alphaville
Lehman fallout weighing on CMBS market, S&P says – FT Alphaville