Thursday, May 07, 2009

Commercial Mortgage Delinquencies Increase Sharply

by Bill McBride on 5/07/2009 02:10:00 PM

From Bloomberg: Commercial Mortgage Delinquencies in U.S. Rise to 11-Year High

The percentage of loans 30 days or more behind in payments rose to 2.45 percent, Trepp LLC said in a report. The delinquency rate was more than five times the year-ago number, Trepp said. The New York-based researcher’s records go back to 1998.
...
Commercial property values fell 21.5 percent through February from their October 2007 peak, according to Moody’s Investors Service.

Properties bought in 2006 are now worth on average 11 percent less than their original price, and those bought in 2007 are worth almost 20 percent less, Moody’s said.
...
Mortgages on rental apartment buildings posted the highest delinquency rate of securitized commercial property loans in April, rising to 5.24 percent from 3.86 percent in March, Trepp said.
These are delinquencies - not losses - but it will be interesting to see the expected losses (and loss rates) for multifamily and non-residential real estate reported this afternoon.

The Fed provides charge-off and delinquency rate for commercial real estate back to 1991. However, the Fed data includes C&D (construction and development) in CRE, so isn't directly comparable to the Trepp data.