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CMBS in 2018: Lower Delinquency, Lower Volume?

Negligible maturing loan volume is likely to improve the late-pay picture further this year, although it may also contribute to a decline in new issuance.

By Paul Bubny | Updated on January 16, 2018

Fitch headquarters in Lower Manhattan Fitch Ratings headquarters in Lower Manhattan.

NEW YORK CITY—The so-called wave of maturities having crested in 2017, the new year bodes well for a more settled outlook on the CMBS market. Fitch Ratings cites strong new issuance volume, continued resolution activity and the slowing pace of new delinquencies all adding up to the sixth consecutive month of decline in the US CMBS delinquency rate, and predicts further declines in late-pays during 2018.

Fitch’s overall US CMBS delinquency rate finished the year at 3.22%, 15 basis points lower than the previous month and 12 bps lower than a year ago, although delinquencies for the office and retail sectors were up from the year-ago period. Using a different yardstick, Trepp LLC said earlier this month that delinquencies had ended the year at 4.89%, a decline of 29 bps from November.

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