Delinquencies among U.S. commercial loans backed by securities surged in May, largely due to a $1 billion net increase in office loans falling behind in payments, Fitch Ratings said.
Fitch's commercial mortgage-backed securities index tracks loans on office, retail, apartment, industrial and hotel properties with mortgage payments at least 60 days overdue.
The May reading shows delinquencies jumped to nearly 8 percent. The credit rating agency said the main culprit behind the increase was office delinquencies.
"As expected, office loan delinquencies have begun to increase and will continue to rise into next year," said Mary MacNeill, managing director.
The latest and largest property to enter the index is the $380 million Columbia Center tower in Seattle.
Commercial-mortgage backed securities are pools of commercial real estate loans that are packaged and sold to investors. Loans packaged into securities only account for about one-quarter of all commercial loans outstanding.
By property type, hotels had the highest delinquency rate in May at 18.6 percent, while apartment properties had a 13.7 percent rate, Fitch said.
The delinquency rate for retail properties was 6 percent, while the rate for industrial properties stood at 5.1 percent.
The rate for office properties was 4.6 percent.
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