NEW YORK–(BUSINESS WIRE)–Despite the second-highest delinquency rate among all property types, U.S. multifamily CMBS fortunes have significantly turned for the better in recent months, according to Fitch Ratings.
Multifamily loans, along with hotels, have rebounded by the most strides over the past two years. In fact, if you take away rent-stabilized New York multifamily loans such as Stuy Town and Riverton Apartments, total late-pays move down substantially from their current 14.4% level to 9.3% at the end of last year. This places multifamily loans firmly in the middle of the pack, behind office and retail.
Small balance loans also contributed notably to the high rate of multifamily delinquencies as they too grossly underperformed market expectations. Remove these loans from the mix and, coupled with stabilizing trends, Fitch expects to see multifamily late-pays gradually decline in the coming months.
Conversely, though office loans benefit from stickier rental streams, delinquencies will increase in the coming months. This will be due primarily to office rents, signed at the height of the market five years ago, beginning to roll to market.
Additional information is available in Fitch’s weekly e-newsletter, ‘U.S. CMBS Market Trends’, which also contains recent rating actions and an overview of newly released CMBS research, including Fitch presales and Focus reports. The link below enables market participants to sign up to receive future issues of the E-newsletter:http://forms.fitchratings.com/forms/CM_MAROptinformLayout