Commercial mortgage-backed securities continued on the path of rising delinquency rates. Real point LLC indicates a delinquency rates of 8.37% while Trepp LLC shows a delinquency rate of 9.65%. Hotels have the highest delinquency rate at 13.2%. Trepp said that the increase in delinquency came even while there were factors putting downward pressure on the delinquency rate. New CMBS are being added to the pool after they have seasoned for six months. This adds less distressed securities to the pool which should lower the delinquency rate, however this is not happening.
Costar group reports that commercial real estate values are still adjusting from the bubble years. They said that 70% of properties that sold from 2005 to 2007 and resold in the first quarter of 2011 sold for a lower price. Comparatively 40% of properties that sold prior to 2005 sold for less during the first quarter of 2011. Costars investment-grade repeat sales Index was down 10.5% in the first quarter after an 8.4% increase in the fourth quarter.
Jones Lang LaSalle reports that office leasing activity in North East Atlanta is tepid. After a relatively flat 2010 the first quarter saw 32,000 square feet of negative net absorption. They said that as in other Atlanta submarkets, the Northeast submarket is seeing increased tenant expansions; however it wasn't enough to move the needle. The overall vacancy rate remains elevated at 24.3%. Rental rates have fallen and the outlook is for continued elevated vacancy until the unemployment rate comes down.
