Fitch projects US CMBS delinquencies will continue to fall — another 2.5-3 percent rate drop by the end of 2016 — after hitting a six-year low at the end of 2015.
Delinquencies finished the year at 4.02 percent, down 17 percent from year-end 2014, according to Fitch’s latest index results.
The rate was down 14 basis points from the previous month and 60 bps lower than one year ago, falling to its lowest level seen since October 2009.
“Resolutions again outpaced new delinquencies in 2015, ending the year at $8.5 billion and $5.6 billion, respectively, compared to $11.5 million and $6.5 billion, respectively, in 2014,” the agency said in a statement.
Though the delinquency rate for CMBS 1.0 will continue to face pressure from approximately $62 billion of loans expected to mature in 2016 and $73 billion in 2017, the rate will continue to fall — in part due to the anticipated resolution of the Peter Cooper Village/Stuyvesant Town and Riverton Apartments assets.
That’s assuming assuming “continued strong new issuance this year.” US CMBS issuance ended 2015 just over $101 billion, a post-recession first, according to data from research firm Trepp.
Issuance of CMBS peaked in 2007, when there was about $230 billion of volume, but that ground to a standstill during the recession.
The delinquency rate fell among all asset types in December, both from the previous month and year. Fitch recorded the drops as such:
-Retail: 5.2 percent (from 5.27 percent in November and 5.37 percent at YE 2014)
-Office: 4.61 percent (from 4.71 percent and 5.01 percent, respectively)
-Hotel: 3.82 percent (from 4.23 percent and 6.2 percent)
-Multifamily: 4.19 percent (from 4.27 percent and 5.22 percent)
-Industrial: 3.88 percent (from 4.38 percent and 5.25 percent);
-Mixed Use: 2.73 percent (from 2.99 percent and not calculated at YE 2014)
-Other: 0.89 percent (from 0.9 percent and 1.15 percent)