Wednesday, November 30, 2011

Commercial Real Estate Direct - CMBS Delinquency Rate Climbs in October, Despite Liquidation of $1.28Bln of Loans

The volume of delinquent CMBS loans increased by $1.06 billion in October, bringing the total volume of loans that are now more than 30-days late to $61.27 billion, according to Morningstar.

Delinquent loans now account for 9.76 percent of the universe of private-label CMBS loans that have seasoned for at least a year. That's up from a 9.51 percent delinquency rate in September.

Given the consistent growth in the delinquency rate in recent months and the fact that the CMBS universe continues to shrink, it could very well top 10 percent in the coming months. The universe tracked by Morningstar, which includes agency transactions, totaled $734.17 billion in October, up from $736 billion a month earlier.

In addition, nearly $55 billion of CMBS loans come due next year and a substantial chunk of them aren't generating the cash flow needed to stay current. Many of those will likely be unable to refinance and could end up in the delinquency rolls.

Read more...Commercial Real Estate Direct - CMBS Delinquency Rate Climbs in October, Despite Liquidation of $1.28Bln of Loans

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