According to Morgan Stanley, commercial mortgage delinquencies surpassed 10 percent for the first time recently.
During April, payments for these mortgages that are more than 30 days late increased by 26 basis points and settled at 10.15 percent for the month. The delinquency pace has slowed recently, however, the rate of those missing payments has been consistent for the last four months, Morgan Stanley's report stated.
"The bottom line is that loan performance is not yet exhibiting significant improvement," relayed a group of analysts led by Richard Parkus in New York. "Many market participants have come to believe that credit deterioration is more or less over, and were caught off guard by April's rise."
In addition to the higher delinquency rate, borrowers that have aging debt continue to struggle with their current loans. Only 63 percent of commercial mortgages in bonds that are scheduled to mature in April were paid off in time. By comparison, this rate was at 33 percent between 2005 and 2008.
The Houston real estate market is one of the more popular regions for commercial buildings recently, as Minneapolis, Dallas and Houston have experienced significant increases in building starts.
Courtesy of 2M Realty News