Office and multifamilydelinquencies continued to climb during the fourth quarter of 2003, reports Fitch Ratings. In fact, total delinquencies increased by $179 million over the third quarter of 2003.
"We noted a sharp rise in multifamily delinquent loans to almost double the dollar amount noted in the previous quarter, along with a 38% increase in the delinquent balance of office loans, caused almost the entire growth in the index," says Mary O’Rourke, senior director at Fitch Ratings.
Retail delinquencies rose slightly, while industrial loan delinquencies declined by 21%. Surprisingly,loans — which had the largest delinquency balance — showed a modest improvement for the third consecutive quarter. The overall hotel delinquency rate increased by only four basis points to 1.69% between the third and fourth quarters of 2003.
"Fitch expects delinquencies, particularly in the multifamily and office sectors, to continue to rise during 2004, but is optimistic that modest positive absorption in the office sector will continue to wear away the oversupply, and the small gains being noted in interest rates will help stabilize the population of apartment renters," adds O’Rourke.