Boston Commercial Real Estate Market Report

Boston among healthiest commercial real estate markets

Boston Business Journal 

Greater Boston’s commercial real estate community appears to be among the healthiest in the country, in terms of the percentage of properties that have remained current on their debt payments.

As of this week, only 2.7 percent of the region’s property loans packaged in commercial mortgage backed securities (CMBS) were either delinquent or in various stages of foreclosure, according to Bloomberg data. CMBS portfolios often include dozens if not hundreds of commercial mortgages which are sliced by risk categories, diced into securities and then sold to investors globally.

As of January, there were roughly $800 billion in U.S.-based CMBS assets. Approximately $46 billion — or 5.8 percent — of those securities were backed by delinquent loans, according to RealPoint Research.

Meanwhile, Greater Boston also had one of the lowest percentages of CMBS loans on so-called watchlists, or rosters of loans at risk of payment delinquencies. The lists are compiled by loan servicers in charge of collecting mortgage payments.

As of this week, Greater Boston had only 14.6 percent of its CMBS loans on watchlists. Dallas-Fort Worth had the country’s highest percentage of CMBS loans on watchlists, with 29.7 percent making the grade.

Phoenix-Mesa, Ariz., had the country’s highest percentage of problem CMBS loans considered delinquent or in a state of foreclosure.