Late payments on loans backing commercial mortgage bonds continued falling at the start of the year, due to strong new issuance volume and continued resolutions for precrisis loans by special servicers, according to Fitch Ratings.
The delinquency rate for commercial mortgage-backed securities dropped 14 basis points to 2.05% from December to January, marking the third consecutive month of declines.
December’s new issuance volume of $6.4 billion, which was more than double the $3.1 billion in portfolio runoff, pushed up the overall index denominator, according to Fitch. New delinquencies totaled $152 million in January, which was strongly outpaced by a total resolution volume of $554 million.
About 60% of last month’s total resolution volume came from CMBS real estate owned dispositions.
All commercial property types saw delinquencies decline in January. At 4.79%, the retail delinquency rate was the highest of all commercial property types, followed by the rate of late payments on office properties, which was 2.59%.
The retail delinquency rate did fall 26 basis points as total resolutions of $261 million were more than three times as high as the new delinquency amount of $77 million, according to Fitch. Regional mall loans and assets in particular realized the largest resolution and new delinquency rate in January.
The delinquency rate for mixed-use properties fell from 2.22% to 1.68%, while the rate for hotel properties ticked down from 1.59% to 1.58% month-over-month. The delinquency rate for industrial properties dropped from 1.24% to 0.98%, and multifamily property types saw their delinquency rates dip down 2 basis points to 0.5%.