I have been busy the last few weeks, which is why blogging has been light. I saw
this article yesterday on CMBS delinquencies that I thought interesting. Here is most of the article:
Analysts said the rate of delinquent loans increased to 9.36% from
9.01% in August. The rate has stayed higher than 9% for all of 2011.
The delinquency rates for all five property types rose in September
from the prior month and are higher than the year earlier: retail to
7.11% from 7.08% in August; office to 8.16% from 7.36%; industrial
11.39% from 11.2%; hotel 14.81% from 14.56%; and multifamily 15.33% from
15.21%.
One new CMBS deal worth $1 billion priced last month and was more
than offset by the $5.9 billion of legacy CMBS that exited the space
during September, lowering outstanding CMBS to $594.6 billion, according
to Moody's.
I am always surprised that retail has the lowest delinquency rate and multifamily the highest. I'd intuitively think retail would have high defaults because so many retail properites were built in response to the new housing that was developed in the 2000s. I don't know what the author of the article means with the statement that "$5.9 billion of legacy CMBS that exited the space during September." These loans obviously refinanced with new CMBS loans.
2 comments:
or, more likely, the $5.9 billion were refinanced (or out of foreclosure) using life insurance company financed loans on the large loans. CMBS financing was dead in August/September.
Don't forget that retail includes all the single tenant buildings, from warehouse stores to the corner MacDonald's. There is a lot of dark space, but there was a lot before the credit crisis. Residential has always tended to have higher leverage ratios, and retail lower.
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