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Investing.com -- U.S. office loan delinquencies increased significantly in September, with the default of a major Manhattan office building playing a central role, according to a report released Friday by ratings agency Fitch.
The office delinquency rate rose 42 basis points to 8.12% in September from 7.7% in August, the report showed.
Office commercial mortgage-backed securities (CMBS) that became at least 60 days delinquent accounted for just over $1 billion of the total $2.05 billion in commercial real estate loans that were newly delinquent by 60 days or more.
A major contributor to this increase was the $180 million loan backing 261 Fifth Avenue, a Manhattan office building constructed in 1928, which defaulted at maturity in September.
Starbucks, one of the building’s prominent tenants, announced in late September that it will close its store at this location along with more than 450 others across the country.
The second-largest office default in September involved a $79 million loan for CityPlace I, the tallest skyscraper in Hartford, Connecticut.
These office loan defaults occurred as overall U.S. CMBS delinquencies of at least 60 days increased by 10 basis points to 3.1% last month, according to Fitch’s findings.
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