NEW YORK CITY—A 44-basis point increase increase in office late-pays helped push US CMBS delinquencies higher in April, Fitch Ratings said Monday. Office has now surpassed retail twice so far in 2017, according to the ratings agency.
For CMBS generally, the month-to-month increase was nine bps, finishing April at 3.50%. New delinquencies of $819 million exceeded total resolutions of $544 million. In addition, portfolio runoff of $7.7 billion exceeded Fitch-rated new issuance volume of $6.7 billion from seven transactions in March, which led to a decrease in the overall index denominator for CMBS delinquencies.
Both the largest new delinquency for the month and the largest resolution occurred within the office sector, according to Fitch. The largest new delinquency, the $85.1-million Gateway I loan, secured by a 514,956-square-foot office property in Newark, NJ, defaulted at its maturity last month.
April's largest resolution was on the $68.75-million Dulles Executive Plaza loan, backed by 379,596-square-foot office property in the Washington, DC suburb of Herndon, VA. The interest-only loan, which had matured in September 2016, was sold in March 2017 and liquidated from the trust in April, with an 11% loss severity. In all, April saw $497 million of new office delinquencies, more than double the month's $204 million of resolutions, leading to a delinquency rate of 5.94% for the sector.
Retail's four-bp increase, to 5.59%, was driven by $237 million of new delinquencies outpacing $209 million of resolutions. Additionally, the overall denominator of Fitch-rated retail CMBS declined by $238 million.
Other property types and their April delinquency rates were as follows: industrial, up three bps to 4.80%; mixed-use, down five bps to 4.11%; hotel, down 14 bps to 3.08%; multifamily, down one bp to 0.62%; and miscellaneous, up five bps to 0.73%.
For CMBS generally, the month-to-month increase was nine bps, finishing April at 3.50%. New delinquencies of $819 million exceeded total resolutions of $544 million. In addition, portfolio runoff of $7.7 billion exceeded Fitch-rated new issuance volume of $6.7 billion from seven transactions in March, which led to a decrease in the overall index denominator for CMBS delinquencies.
Both the largest new delinquency for the month and the largest resolution occurred within the office sector, according to Fitch. The largest new delinquency, the $85.1-million Gateway I loan, secured by a 514,956-square-foot office property in Newark, NJ, defaulted at its maturity last month.
April's largest resolution was on the $68.75-million Dulles Executive Plaza loan, backed by 379,596-square-foot office property in the Washington, DC suburb of Herndon, VA. The interest-only loan, which had matured in September 2016, was sold in March 2017 and liquidated from the trust in April, with an 11% loss severity. In all, April saw $497 million of new office delinquencies, more than double the month's $204 million of resolutions, leading to a delinquency rate of 5.94% for the sector.
Retail's four-bp increase, to 5.59%, was driven by $237 million of new delinquencies outpacing $209 million of resolutions. Additionally, the overall denominator of Fitch-rated retail CMBS declined by $238 million.
Other property types and their April delinquency rates were as follows: industrial, up three bps to 4.80%; mixed-use, down five bps to 4.11%; hotel, down 14 bps to 3.08%; multifamily, down one bp to 0.62%; and miscellaneous, up five bps to 0.73%.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
