S&P expects CMBS delinquencies to reach 7-8% in 2010. The delinquencies were 1.1% at the start of 2009 and ended 2009 with 5.15% worth of delinquencies.
The question to ask is 2010 the peak in delinquencies? S&P believes 2011 will be the peak.
S&P also concludes the following:
In the March 2001 to November 2001 recession, delinquencies peaked at 1.96% in December 2003, which is 25 months after the recession ended.
From July 1990 to March 1991 recession, delinquencies peaked at 7.53%, which is 15 months after the recession ended.
One must conclude that the peaks are expanding. I don't see delinquencies peaking until at least sometime in late 2012, at at least 20%. It all depends on all of those lousy CMBS deals (Lehman & Archstone) that were done in the vintage years of 2006-2008. Delinquencies tend to be highest in years 3-5 in the lifespan of a loan, which means 2006-2008 is primed for delinquencies and outright default. Especially 2006-2007 which make up some 3/5Th's of outstanding CMBS principal.
I am still trying to find out why the banks are still buy's?
http://www.housingwire.com/2010/02/15/cmbs-delinquencies-and-special-servicing-hit-record-highs/
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