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Late-Pays Decline Again as Legacy CMBS Shrinks

CMBS 1.0 transactions now have a delinquency rate of more than 43%; however, Fitch Ratings says these pre-2009 deals represent an increasingly small slice of the pie.

Exterior of Bangor Mall October’s largest new CMBS delinquency was the $80-million loan on the Bangor Mall in Maine.

NEW YORK CITY—Halloween proved to be a treat for the CMBS market this year, as the last day of October saw delinquencies for securitized commercial mortgages drop for the fourth month in a row. The three-basis point drop brought the late-pay rate down to 3.5%, as new issuance volume of $8 billion more than doubled portfolio runoff, Fitch Ratings said Friday.

In fact, delinquencies for so-called CMBS 1.0 transactions—those issued prior to the market for CMBS collapsing amid the Global Financial Crisis—have increased in each of the past 21 months, according to Fitch. The delinquency rate for these pre-2009 legacy transactions now exceeds 43%.

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Paul Bubny

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.

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