Dispositions from Deal Drive CMBS Index’s Late-Pay Drop


Fitch in its latest monthly index recorded the largest drop in commercial mortgage-backed securities delinquencies since the end of the recession, but noted that it was the result of many dispositions from a single transaction.

At 6.78%, CMBS delinquencies were down by 40 basis points in July compared to the previous month, according to Fitch. This is 2.23% lower than the reading on Fitchs index when delinquencies in this category peaked two years ago in July of 2011.

The company found special servicer ORIXs asset sales from the LB-UBS 2007-C2 CMBS deal accounted for $759 million of dispositions on a stated loan balance basis. In total there were $2 billion in dispositions during the month as compared to $561 million in new delinquencies added to the index.

The ORIX sales contributed to a drop in net delinquencies in all property types compared to June, according to Fitch. The drop in delinquencies was most dramatic in the office category where delinquencies fell 59 basis points to 7.59%

Decreases in other property type categories were as follows: industrial delinquencies at 9.56% were down 21 basis points, hotel delinquencies at 8.04% were down 31 basis points, multifamily delinquencies at 7.41% were down 18 basis points and retail delinquencies at 6.37% were down 37 basis points.

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