Chart of the day: CMBS delinquencies

September 14, 2009

The delinquency rate for commercial mortgage-backed securities continues to rise.

(Click chart to enlarge in new window)

screen-shot-2009-09-14-at-104001-am

From Moody’s (no link):

Moody’s … latest CMBS Delinquency Tracker (DQT) records the aggregate rate of delinquencies among US CMBS conduit and fusion loans at 3.23%, based on data through the end of August…

“Although the rate of increase has tapered off in the past two months, it is much too early to count on this trend continuing,” says Moody’s Managing Director Nick Levidy.  “In fact, we expect that the monthly change in the delinquency rate will resume an upward trend over the next several months as troubles compound in the commercial real estate sector.”

Of the five core property types tracked by Moody’s DQT, the multifamily sector continues to have the highest delinquency rate.   In August delinquencies for this sector were at 5.51%, an increase of 51 basis points since July.

After two months of posting leaps in delinquencies of over 100 basis points, the hotel sector saw its delinquency rate decline in August by 51 basis points to 4.18%.

Retail properties had a 22 basis point increase in delinquencies during August, raising the rate to 3.41%.  Half of the ten largest currently delinquent loans are backed by retail properties.

Office and industrial both had a 21 basis point increase in delinquencies in August.  The office delinquency rate is now 2.01%, the lowest among the five sectors. Office properties, however, generally have long-term leases so the sector”s delinquencies often lag those of the other property types.

Industrial properties are the second best performing property type, with a delinquency rate of 2.46%.

By state, Nevada and Michigan continue to post the highest delinquency rates, with Nevada at 8.69% and Michigan at 8.55%.  The rates for both states rose nearly a 100 basis points during August, Nevada having been at 7.71% in July and Michigan at 7.65%.

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Interesting.

The multifamily sector problem must be quite worrying to Joe the Plumber and Family and Community Banks.

The economy is still in the woods with the various lags and compound multipliers that will only show up in the next 5 years. Politicians have to calm voters, that is their job. Economists have to calm down politicians, that is their job. Mathematicians have to calm down economists, that is their job. Actuaries have to calm down Mathematicians, that is their job. Portfolio Managers and Traders manipulate and apply all this knowledge, that is their job.

Yesterday there were results of two polls, one from economists, one vox populi. I wonder how these correlate ?

Posted by Casper | Report as abusive