Rating Agencies Not Worried About Real Estate.(real estate industry statistics)(Brief Article)(Statistical Data Included)

Two rating agencies have recently released data suggesting that while commercial real estate markets are feeling the effect of a weak economy, real estate is not in for the kind of beating it took in previous recessions.

Fitch Ratings said that while the number of delinquencies within commercial mortgage-backed securities has risen, over 90% of deals rated by Fitch have delinquency rates below 3%.

Of the 360 CMBS transactions under Fitch surveillance, 72% have delinquency rates below the 1.25% average calculated for the month of January. Only 9.5% of the transactions have delinquencies that exceed 3%.

But the 1.25% average is an increase from 1.11% in December and 1.03% in November of last year.

"The trend of increasing CMBS delinquencies is not surprising," said Donna Daley Schneider, senior director, Fitch Ratings. "Fitch expects it to continue as slow economic conditions continue to affect the real estate market, but Fitch Ratings does not expect delinquency rates to approach the almost 7% peak level seen in the early 1990s."

The transaction with the highest delinquency rate is Nomura Asset Securities Corp., 1994-MD1, at 46.14%. ...