CMBS Delinquencies

First post, it's not that awesome, but with this I've officially started my blog, a truly momentous occasion.
From CalculatedRisk:

"Rising defaults among all property types led to a 42 basis point (bp) increase in U.S. CMBS delinquencies to close out 2009 at 4.71%, according to the latest Loan Delinquency Index results from Fitch Ratings."

The entry suggests CMBS delinquencies might not peak until 2012. Rising numbers of loans will come due in the next 2 years, leading to higher default rates. It's estimated delinquencies could peak near the 12% level in 2012.

This information parallels some other stories we've seen over the last few days in commercial real estate. The U.S. apartment vacancy rate is at a 30 year high, commercial office vacancy rates are at 15 year highs, hotel occupancy is at its lowest levels since the great depression, and mall vacancies are reaching record highs. The rising number of vacancies and subsequent falling rents make a 12% delinquency rate in early 2012 very possible.

Paul Krugman noted today that while much of the MBS disaster was concentrated in larger institutions, the CMBS story is more widespread among smaller banks. The fed needs to continue watching this story as it develops, further tightening of credit markets will be detrimental to the recovery. I can't imagine we'll see much hiring in the private sector while commercial real estate is having problems of this magnitude.