July's largest new delinquency occurred in the retail sector, although in common with most property types, retail saw its late-pay rate decline in July. Partly that's because July's largest resolution was also on a retail loan, the $110-million Westfield Shoppingtown Independence loan that by itself accounted for more than 25% of the $427 million in retail loans that were resolved during the month.

Although delinquencies on CMBS backed by retail properties—still the worst-performing sector—declined just five bps to 6.18% during July, regional malls saw a more substantial 26-bp drop to 4.83%. Regional malls account for approximately 33% of the overall Fitch-rated retail universe, and 26% of total overall retail delinquencies.

Industrial delinquencies saw the largest decline of all property types in July, falling 90 bps to 4.27%. This was due to $116 million in resolutions compared to just $8 million in new delinquencies.

The 41-bp decline in the office delinquency rate, to 5.82%, was due to $176 million in resolutions exceeding the sector's $60 million in new delinquencies. Moreover, there was also a significant increase in the overall office universe, up $3.2 billion month-over-month across 10 new transactions that Fitch had rated in June.

Hotel delinquencies saw a modest six-bp decline to 2.78%, while multifamily's late-pay rate ticked upward by two bps to 0.69%. Mixed-use securitizations were unchanged with a 4.20% delinquency rate, and “other” property types saw a 23-bp drop in delinquencies to 0.83%.

CBRE's report found that conduit CMBS accounted for 36% of non-agency originations during Q2, compared to a 16% share in the year-ago period. Year to date, CMBS issuance reached $38.8 billion as of June 30, well above the $30.7-billion tally this lending class had reached at the end of Q2 2016. With July's new additions, the tally of new issues is now approaching the $50-billion mark, although many analysts expect the year to end with essentially the same total as was issued during '16.

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.

The size of July's new issuance volume contributed to a higher overall index denominator, exceeding portfolio runoff of $5.9 billion by a wide margin. Meanwhile, resolutions of $844 million exceeded $544 million in new delinquencies.

July's largest new delinquency occurred in the retail sector, although in common with most property types, retail saw its late-pay rate decline in July. Partly that's because July's largest resolution was also on a retail loan, the $110-million Westfield Shoppingtown Independence loan that by itself accounted for more than 25% of the $427 million in retail loans that were resolved during the month.

Although delinquencies on CMBS backed by retail properties—still the worst-performing sector—declined just five bps to 6.18% during July, regional malls saw a more substantial 26-bp drop to 4.83%. Regional malls account for approximately 33% of the overall Fitch-rated retail universe, and 26% of total overall retail delinquencies.

Industrial delinquencies saw the largest decline of all property types in July, falling 90 bps to 4.27%. This was due to $116 million in resolutions compared to just $8 million in new delinquencies.

The 41-bp decline in the office delinquency rate, to 5.82%, was due to $176 million in resolutions exceeding the sector's $60 million in new delinquencies. Moreover, there was also a significant increase in the overall office universe, up $3.2 billion month-over-month across 10 new transactions that Fitch had rated in June.

Hotel delinquencies saw a modest six-bp decline to 2.78%, while multifamily's late-pay rate ticked upward by two bps to 0.69%. Mixed-use securitizations were unchanged with a 4.20% delinquency rate, and “other” property types saw a 23-bp drop in delinquencies to 0.83%.

CBRE's report found that conduit CMBS accounted for 36% of non-agency originations during Q2, compared to a 16% share in the year-ago period. Year to date, CMBS issuance reached $38.8 billion as of June 30, well above the $30.7-billion tally this lending class had reached at the end of Q2 2016. With July's new additions, the tally of new issues is now approaching the $50-billion mark, although many analysts expect the year to end with essentially the same total as was issued during '16.