The Mortgage Bankers Association has released its Quarterly Data Book that includes all sorts of useful charts and graphs about the overall health of commercial real estate.
The 102-page book compiles in one location data on development, leasing, investment and finance. Among the more interesting charts is a comparison of delinquency rates among different types of lenders. Most often, data on delinquencies looks at the state of CMBS, where the problems are the most acute. The challenges in that sector stand out dramatically in comparison with other investor groups.
According to the report, between the third and fourth quarters, the 30+ day delinquency rate on loans held in commercial mortgage-backed securities (CMBS) rose 1.63 percentage points to 5.69 percent. The 60+ day delinquency rate on loans held in life company portfolios decreased 0.04 percentage points to 0.19 percent. The 60+ day delinquency rate on multifamily loans held or insured by Fannie Mae rose 0.01 percentage points to 0.63 percent. The 90+ day delinquency rate on multifamily loans held or insured by Freddie Mac increased 0.04 percentage points to 0.15 percent. The 90+day delinquency rate on loans held by FDIC-insured banks and thrifts rose 0.49 percentage points to 3.92 percent.
“The ongoing impact of the economic fallout on commercial real estate markets continued to drive up commercial and multifamily mortgage delinquencies for most investor groups in the fourth quarter,” according to Jamie Woodwell, MBA’s vice president of commercial real estate research. “Continued job losses, consumer restraint and a lack of household growth all sustained the pressure on commercial real estate operations and mortgages during the fourth quarter.”
The MBA’s delinquency analysis does not include construction or development loans. This is because many regulatory definitions count all construction loans as commercial real estate, including debt that is backed by single-family residential development projects. As a result, it is difficult to obtain a picture of the true delinquency rate for commercial real estate construction projects.
The data on delinquencies is also interesting when contrasted with the overall outstanding debt by sector. While CMBS debt has the highest delinquency rate, the amount of outstanding debt in that sector has dropped to $690.4 billion—down from $788.2 billion at the end of 2007. Meanwhile, life companies, where the delinquency rate is lowest, account for $307.4 billion, which is up slightly from $304.0 billion at the end of 2007.