Wednesday, December 3, 2008

Commercial Mortgage Hitting the Skids

From Bloomberg:

Commercial mortgage delinquencies rose in November and will climb more as the economy slows and unemployment grows, according to Barclays Plc.

Payments more than 60 days late on commercial real estate loans that were bundled together and sold as bonds increased to 0.69 percent last month, compared with 0.57 percent in October and 0.51 percent in September, Barclays data show.

The “relative spike” in delinquent loans marks the “beginning of a sustained, upward trend,” Barclays analysts led by Aaron Bryson in New York said in a report yesterday. “We have repeatedly stressed that CMBS delinquencies are a lagging indicator of performance and tend to lag changes in employment by close to a year.”

Commercial property owners are having a harder time making debt payments as the recession curtails spending and crimps business growth. U.S. companies eliminated an estimated 250,000 jobs last month, the most since November 2001, ADP Employer Services said today.

1.) This should surprise, well, nobody, and

2.) It's going to get worse. A lot worse