CMBS Delinquency Rate Rises to 8.02%, Office Sector Under Pressure

By RadCRE Research · 2026-10-12 · Industry Insights

The overall CMBS delinquency rate climbed to 8.02% in September 2026, marking its highest level since November 2020, driven by office and lodging loans [1].

CMBS Delinquency Rate Reaches Multi-Year High Amidst Sectoral Pressures

The commercial mortgage-backed securities (CMBS) market experienced a notable shift in September 2026, with the overall delinquency rate increasing to 8.02% [1]. This marks the highest reported rate since November 2020, reflecting ongoing pressures within specific segments of the commercial real estate lending landscape [1]. The 17-basis-point rise in the overall delinquency rate during September was largely attributed to five significant loans associated with office, mixed-use, and lodging properties [1].

The increase in delinquencies stems from various factors, including borrowers encountering maturity challenges and loans moving into foreclosure status [1]. This trend underscores the evolving financial conditions and their impact on property owners and investors in the CRE sector [1].

Sector-Specific Delinquency Trends

A granular look at asset classes reveals varied performance within the CMBS delinquency landscape:

• Office Sector: Office property delinquencies saw a significant rise, reaching 12.16% [1]. This figure highlights the sustained challenges faced by the office sector, which has been under considerable stress as financing conditions evolve [1].
• Multifamily Sector: The multifamily sector also reported an increase, with its delinquency rate reaching 8.04% [1].
• Retail Sector: In contrast to the other asset classes, the retail sector demonstrated an improvement, with its delinquency rate decreasing to 6.58% [1]. This positive development for retail was supported by several large mall loans either returning to performing status or being paid off [1].

The divergence in performance across property types underscores the importance of granular analysis in assessing the health of the CMBS market. While some sectors show signs of stabilization or improvement, others, particularly office and lodging, continue to navigate significant headwinds [1].

For commercial real estate stakeholders, vigilance in monitoring loan performance, actively exploring refinancing alternatives, and maintaining a strong focus on property-level fundamentals are critical strategies in the current environment [1]. These measures are essential for mitigating risks and capitalizing on opportunities as the market continues to adapt to prevailing economic and financial conditions.

RadCRE Perspective

“The rise in the CMBS delinquency rate to 8.02% in September is a clear indicator that certain segments of commercial real estate, particularly office and lodging, are still under considerable stress. The significant uptick driven by five large loans tied to these sectors highlights the continued challenges borrowers face with maturities and property performance. While retail shows resilience, the broader market requires a proactive approach from investors. Monitoring loan performance and property fundamentals isn't just best practice; it's essential for navigating this market. We continue to advise clients on strategic refinancing and value-add opportunities, especially in distressed scenarios, leveraging our deep market insights to unlock value where others see only risk.”

— Majid Radaei, Founder & Principal Broker, RAD Commercial Realty

Tags: CMBS delinquency rate, commercial real estate finance, office market challenges, CRE investment analysis