The bank default rate among commercial real estate loans in the first quarter of 2012 fell to its lowest level in nearly three years, according to an analysis released May 30.
The current default rate of 3.45 percent declined from the previous quarter’s rate of 3.57 percent and the year-earlier period’s default rate of 4.20 percent, according to the data from Chandan Economics. However, the total decline is largely attributable to the multifamily sector, which saw its default rate fall to 2.36 percent from 2.53 percent in the previous quarter and 3.67 percent in the first quarter of 2011.
“The overall decline in the default rate reflects a relatively larger improvement in legacy apartment loan performance,” said Sam Chandan, president and chief economist with Chandan Economics. He added that the improvement in the level of multifamily defaults reflected the sector’s improving cash flows and broader availability of debt for acquisitions and refinancing.
Read more...Loan Default Rates Continue to Decline via REIT.com