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Hotel Defaults Push CMBS Delinquencies Higher

US CMBS delinquencies rose 54 basis points in September. Guess which sector was the leading culprit?

By Maria Wood | Updated on October 29, 2009

NEW YORK CITY-US CMBS delinquencies rose 54 basis points in September, ending the month at 3.58%, according to Fitch Rating’s latest Loan Delinquency Index. Leading all property types was lodging, which had the largest proportion of delinquencies at 5.83%.

“The recent surge in hotel defaults is consistent with Fitch’s view that hotel property values will decline by as much as 50% from peak levels,” says Fitch managing director and US CMBS group head Susan Merrick. “While budget hotels have fared best during the downturn, continued pressure on the luxury, resort and gaming sub-sectors will likely push lodging delinquencies to approximately double that of other property types.”

In September, lodging surpassed multifamily with the highest percentage of late pays. In descending order, the other property-type delinquency rates came in at multifamily (5.72%); retail (3.65%); industrial (2.96%); and office (1.97%).

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