Wednesday, February 17, 2010
Now back to the slow-motion crash...
...already in progress.
U.S. commercial mortgage delinquencies continued to climb in January,
with the increase from December the largest since the downturn began,
according to Moody's Investors Service.
The rate rose to 5.42% last month from 4.9% the previous month as another
409 loans became delinquent, according to Moody's Delinquency Tracker. "We
continue to expect loan performance to deteriorate further in 2010," added
managing director Nick Levidy.
Commercial real estate has been pummeled for more than a year as
occupancy rates and rents fall, putting increased pressure on property
owners, especially those who bought around the top of the bubble several
The hotel delinquency rate grew the most in January, to 9.82%, followed
by retail loans, which make up 30% of the total outstanding balance and 40%
of last month's new delinquent loans. On a percentage basis, the
month-to-month change in the delinquency rate--which now sits at 5.24%--was
bigger for retail than the hotel sector.
The smallest increase was in loans backed by office properties. That
segment also has the lowest delinquency rate, 3.53%
By region, the West and Midwest saw the biggest delinquency rate
increases in January.