CMBS Distress Rate Climbed to 11.86% in May

CRED iQ’s overall commercial mortgage-backed securities (CMBS) distress rate rose to 11.86 percent in May 2026, up from 11.08 percent in April, as both special servicing and delinquency moved higher across the conduit and single-asset, single-borrower (SASB) universe. 

The reversal erased April’s brief improvement and pushed distress back toward the cyclical highs observed across the trailing 12 months. Viewed over a longer horizon, the trajectory is unmistakable as the overall distress rate has more than doubled since mid-2022 when it sat near 5 percent, underscoring that resolution activity is not yet keeping pace with new transfers into distress.

CRED iQ defines its overall distress rate as the balance-
weighted share of loans that are either delinquent, in special servicing or both. This combined lens captures stress that headline delinquency figures alone can miss, because a loan can transfer to a special servicer for imminent default, maturity default or covenant breaches well before it misses a payment. Measured across the full conduit and SASB space, the May 2026 reading reflects a broad, balance-weighted view of credit performance rather than a simple loan count.

All three core measures CRED iQ tracks turned higher month-over-month.

The overall distress rate was 11.86 percent, up 78 basis points (bps) from 11.08 percent in April, while the special servicing rate finished at 11.25 percent, a month-over-month increase of 64 bps from 10.61 percent. The delinquency rate finished at 9.53 percent, up 58 bps from 8.95 percent the previous month. 

The persistent gap between the special servicing rate and the delinquency rate — roughly 170 bps in May — signals that a meaningful share of distressed balance is being actively worked out by servicers before, or instead of, becoming payment-delinquent. For investors and lenders, that spread is a leading indicator worth monitoring as 2026 and 2027 maturities approach.

Office remains the clear epicenter of distress at a 17.11 percent distress rate — the most troubled major segment. Mixed-use follows at 16.12 percent, while lodging (at 12.27 percent distress) sits above the overall average. 

Multifamily distress reached 10.95 percent as elevated rates continue to pressure floating-rate and bridge financing. At the opposite end, the resilience leaders are striking: self-storage (0.15 percent), industrial (1.04 percent) and manufactured housing (1.19 percent) all remain near pristine, reflecting durable demand fundamentals and stable, granular cash flows.

Mike Haas is the founder and CEO of CRED iQ.