NEW YORK (AP) — The delinquency rate on U.S. commercial mortgage loans backing securities rose in September by the smallest margin in two years, according to Moody’s Investors Service.
The rate increased 0.14 percentage points to 8.24 percent, the smallest monthly increase since October 2008, the firm said.
While encouraging, the trend doesn’t necessarily point to an improving commercial mortgage-backed securities market, said Nick Levidy, Moody’s managing director.
“The number and balance of loans becoming newly delinquent remain high, but in the past few months the number of loans that became current, worked out or disposed has increased,” Levidy said.
Commercial-mortgage backed securities are pools of commercial real estate loans that are packaged and sold to investors.
In September, 311 loans totaling nearly $3.8 billion became newly delinquent, while 238 previously delinquent loans, totaling roughly $3.3 billion, became current, had terms worked out or were disposed.
All told, there were 3,971 delinquent loans totaling $52 billion last month, according to Moody’s Delinquency Tracker, which tracks loans going back to 1998.
Loans on hotels posted the biggest delinquency rate jump last month to 15.94 percent. Industrial properties had the second-highest increase, but overall continued to have the lowest delinquency rate of all commercial property types at 6.32 percent.
Office properties posted the third-largest increase in delinquency rate, rising to 6.40 percent. The delinquency rate on retail properties rose slightly to 6.60 percent.
Loans on apartments saw their delinquency rate decline last month to 13.42 percent.
On a state level, Nevada had the largest delinquency rate in the nation, Moody’s said.
The state’s 26.22 percent rate last month was more than triple that of the rest of the U.S.
Still, Nevada’s loans make up less than 2 percent of all U.S. commercial mortgage-backed securities, Moody’s noted.
The state with the second-highest commercial loan delinquency rate last month was Michigan.
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