Retail and Office Delinquencies Shoot Up

From CoStar:

Increased volatility in the office and retail sectors have led to a two basis point increase in U.S. CMBS delinquencies, according to the latest Fitch Ratings loan delinquency index. While overall delinquencies increased only mildly for the fifth consecutive month, the retail and office sectors led the index with net increases of $70.5 million and $62.2 million, respectively.

Despite relatively stable performance to date, Fitch remains concerned about the retail sector.

"An increase in retail bankruptcies and a continued decline in consumer disposable income are evident, though they have yet to impact retail performance," said Susan Merrick, managing director of Fitch. "High energy and commodity prices, rising unemployment, housing market weakness, and lower credit availability continue to negatively impact retail sales and are expected to dampen retail sector growth going forward. Recent store closings, including continued bankruptcy filings of tenants such as specialty retailer Linens 'n Things and discount-apparel retailer Steve & Barry's, will impact retail performance."

Retail loan delinquencies increased 25.7%...Click here for the rest of the article.