Defaults on commercial mortgage-backed securities declined for the fifth straight year in 2015, according to Fitch Ratings.
The annual default rate fell to 0.4% last year, after peaking at 4.1% in 2010. The cumulative default rate for CMBS fell to 13% from 13.3% in 2014.
In total, 181 loans defaulted with a balance of $2.7 billion in 2015, compared to 294 loans totaling $3.9 billion in 2014 and 353 loans totaling $5.4 billion in 2013. Most of the new defaults came from the 2005-2007 period when CMBS originations peaked.
Office properties were the largest contributor to new defaults, with 64 loans going bad with a total balance of $1.4 billion.
Fitch expects the cumulative default rate to increase slightly in 2016, as CMBS 2.0 loans begin to default at a higher rate and new issuance volume declines.
