Increasing default rates among the three core property types in commercial mortgage-backed securities (CMBS) drove the cumulative default rate up in 2001, according to a survey by New York-based Fitch Ratings.

The study of conduit loan defaults found that the increase in the default rate from 1.02% in 2001 to 1.8% in 2001 was largely attributable to the performance of the multifamily, retail and office sectors.

The default rate received the biggest jolt from the multifamily sector, which makes up approximately 32% of the CMBS volume, according to Erin Stafford, director of Fitch Ratings. The multifamily default rate rose from 0.96% in 2001 to 1.24% in 2002.

The retail default rate, which increased from 0.87% in 2001 to 1.93% in 2002, was due largely to bankruptcies of the anchor or sole tenant, the report states. The implosion of technology companies and the rise of office vacancies drove the default rates for the office sector to 0.85% in 2002, more than double the 0.41% rate in 2001.