NEW YORK CITY—Continuing the momentum identified by CBRE in its second-quarter Lending Momentum Index earlier this month, CMBS issuance in July reached $9.4 billion, Fitch Ratings said Friday. The strong new issuance volume went a long way toward the biggest monthly decline in delinquencies for Fitch-rated CMBS since January 2016, when the Peter Cooper Village/Stuyvesant Town loan was resolved.
That being said, pre-2009 deals are more likely by far to be in arrears than so-called CMBS 2.0 transactions. While July's 12-basis point decline brought the overall CMBS delinquency rate down to 3.60%, for CMBS 1.0 the late-pay rate is now 35.33%, up 369 bps from the previous month. Delinquencies on legacy securitizations have increased in each of the past 18 months.
This doesn't mean the CMBS 2.0 universe is trouble-free. July also saw a two-bp uptick in delinquencies among newer CMBS issues, to 0.21%. Yet $12 billion in the $12.68 billion in Fitch-rated CMBS that is currently delinquent is comprised of 1.0 deals, and 777 of the 868 Fitch-rated loans in delinquency are legacy issues. At July 31, the Fitch-rated universe of $319 billion in 2.0 deals far exceeded the $39 billion in legacy CMBS.
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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.
