For those who are considering a new commercial real estate loan, it is important to know that commercial-backed securities (CMBS) are experiencing historically high delinquency rates. Not only will this affect future interest rates, it may mean that banks and other financial institutions will be tightening their belt and approving fewer loans regardless of the borrower’s past history or ability to repay the loan.

The overall delinquency rate has climbed from a relatively normal 2.77% last year to the historical high of 8.42% in May, 2010. For, seriously delinquent loans (this figure eliminates anything under 60 days past due) the current figure is 7.55% while last year’s rate was 2.18%. Fitch Ratings forecasts that this trend will continue through the end of 2010 and will exceed 11% by the end of December. Continue reading “CMBS Delinquencies Reach Historic High” »