NEW YORK CITY—Although the month-to-month drop in CMBS delinquencies overall to 5.13% was the smallest in more than a year at three basis points, securitized hotel loans did considerably better than that. The lodging sector saw its rate of late-pays on CMBS decline by 17 bps from March to 5.18%, Fitch Ratings said last week, with the $90 million in resolutions outpacing the $50 million in new delinquencies.

The reduction in the hotel CMBS delinquency rate appreciably narrowed the gap between the lodging sector and retail. Still the best-performing sector with just 5.11% of Fitch-rated loans overdue by 60 days or more, retail's delinquency rate declined by only four bps from March.

As it was in March, office was in third place; however, office CMBS delinquency ticked upward between March and April, the only one of the five major food groups to do so. Office finished the month at 5.43%, compared to 5.36% in March.

Helping to drive an uptick in office CMBS delinquency was the largest new delinquency in April, the $80-million 1111 Marcus Ave. securitization (JPMMC 2006-FL2). The loan is secured by a condominium interest in an office complex in New Hyde Park, NY, originally scheduled to mature in October 2009 with two one-year extension options.

In November 2011, the borrower signed a forbearance agreement, which expired this past October. The loan was transferred back to special servicing in September 2013 due to imminent default and the forbearance was subsequently extended to April 9, 2014. However, the loan was reported as being in foreclosure last month, and Fitch says it's been informed by the special servicer that the borrower has agreed to a deed in lieu, which is expected to close this quarter.

Conversely, however, office also figured in last month's largest resolution among Fitch-related CMBS loans. The $80.5 million Central Parke Pool (WBCMT 2006-C25), an REO asset that was sold for a 61% loss, consisted of 10 office and flex properties and one retail property in Cincinnati, with occupancies ranging from zero to 96%.

Rounding out the five major property types were multifamily, with a six-bps drop from March to 5.97%, and industrial, still the worst-performing property type for CMBS loans although its April delinquency rate of 6.67% was seven bps lower than in March. Industrial had shown the greatest improvement in March, with Fitch reporting a 64-bps decrease in CMBS late-pays from 7.38%.

As for the relatively modest decline overall in CMBS late-pays, Fitch noted the same absence observed by Trepp when it issued its own report on April delinquencies earlier this month: a lack of large distressed portfolio sales. “The largest monthly declines over the past year (40 bps or more) came as servicers Orix and CWCapital employed bulk sales to dispose of assets,” according to Fitch. “The CW bulk sale has recently concluded; none of the servicers currently have assets marketed as part of a bulk sale.”

Similarly, Trepp noted a dropoff in volume, period, between April and the month prior. “In February and March, over $4.5 billion in loans were resolved,” Trepp said earlier this month. “In April, that amount was just $850 million. Despite the drop in volume, resolved loans and cured loans were able to push the delinquency rate down.”