CMBS Delinquency “Squared” – Exponential Defaults Through 2010 and Beyond

Realpoint recently came out with some very sobering stats for the $700 billion CMBS market. While the velocity of defaults is indeed staggering; for those who follow the capital markets, it just confirms what we already know: More pain (as well as opportunity) lies ahead for CRE.

CMBS delinquencies in November rose 16% over October to just under $38 billion. What’s worse, year over year (thru November) delinquencies were up a mind-numbing 440%. Now to be fair, there were some 800 lb. gorillas that distorted the numbers (the Extended Stay America and Stuyvesant Town loans of $4.1bl and $3bl respectively). That being said, Realpoint estimates delinquencies on the unpaid balance (UPB) is set to rise another 31% to 58% by mid-year. (more…)