Fitch: August CMBS delinquencies drop to 8.65% from record rate in July

The rate of delinquencies on loans in commercial mortgage-backed securities fell in August and monthly volatility will continue, according to Fitch Ratings. Delinquencies decreased to 8.65% last month from a record 9.01% in July, as $3 billion worth of loans left the ratings agency’s index. “Though delinquencies have held below 10% and special servicing volume has come down from 2010 peaks, tracking formerly delinquent or specially serviced loans will remain a challenge for investors,” according to Mary MacNeill, Fitch managing director. The delinquency rates in all five types of CMBS decreased in August with the largest decline in office properties to 6.13% from 6.64%. Multifamily delinquencies fell to 15.88% from 15.92% in July; hotel delinquencies decreased to 14% from 14.22%; the rate of delinquencies for industrial mortgages slid to 10.12% from 10.45%; and retail delinquencies declined to 6.77% from 7.01%. New delinquencies in August totaled $1.7 billion and included three loans with a balance of more than $100 million. Analysts said loans that use a longer workout can be more difficult to monitor than liquidated loans, which have “an immediate and measureable impact on their respective trusts.” “Further complicating surveillance is a frequent lack of financials for troubled loans and volatile or inconsistent loan status reporting,” according to Fitch. Fitch recently said the number of loans within CMBS coming due next year is set to drop 40%. Write to Jason Philyaw. Follow him on Twitter: @jrphilyaw