The national commercial mortgage-backed securities (CMBS) distress rate edged up to 11.2 percent in October compared to 10.9 percent a year earlier.
Underscoring this distress is 2400 Market Street in Philadelphia. The building is 99.5 percent occupied, and its largest tenant, Aramark, has a lease that runs to 2034. Even so, the $205 million CMBS loan on the building moved to a special servicer on Sept. 29 for imminent default ahead of its Dec. 9 maturity. The servicer is pursuing a modification.
In October alone, CRED iQ’s property alerts flagged $4.5 billion of conduit and single-asset, single-borrower (SASB) CMBS debt as newly delinquent or newly in special servicing, and 93 percent of it was past maturity or within six months of it. Office made up $1.5 billion, hotels $1.1 billion, retail $700 million and industrial $500 million.
The map moved more with New York’s CMBS distress rate falling to 11.2 percent from 12.5 percent a year ago, while Los Angeles rose to 14.6 percent from 9.4 percent, Chicago’s CMBS distress rate rose to 23.5 percent from 19.5 percent, and Houston’s rose to 15.3 percent from 12.4 percent.
New York is improving, but its maturities keep missing
New York’s October alerts were maturity failures. The Essex, a $117 million loan on a mostly residential Manhattan building, went to a special servicer after the borrower said it could not repay at its Oct. 30 maturity. The $100 million 60 Madison Avenue loan, on an office building 58 percent occupied at year end, passed its Oct. 6 maturity as the borrower seeks an extension.
Across the river, the $231 million loan on 101 Hudson Street in Jersey City, which is 65 percent occupied, went unpaid at its Oct. 11 maturity.
Office trouble spreads to L.A., Chicago and Houston
Office is 16.4 percent distressed nationally and 44 percent of all distressed balance. In Los Angeles, where office distress more than doubled to 21.5 percent from 9.9 percent, the $74 million Equitable Plaza loan missed its extended Oct. 6 maturity; the tower was last valued at $57.7 million, against $150.5 million at origination.
Chicago office distress is 32.6 percent, and the $54 million Executive Towers West loan in suburban Downers Grove (63 percent occupied) went to a special servicer. Houston office distress rose to 31.5 percent from 21.9 percent, and the strain is reaching last year’s debt with three 2025 Houston multifamily loans comprising $93.5 million going 30 days delinquent in October.
Warehouses, malls and hotels hit their maturity dates
Industrial is not exempt. The $321 million LBA 2024-7IND loan, on warehouses in 10 states, matured Oct. 9 without being repaid. An extension is in process. The $325 million Fresno Fashion Fair loan went 30 days delinquent ahead of its Nov. 1 maturity, even though the mall is 97.6 percent occupied. A $746 million loan on more than 70 select-service hotels (THPT 2023-THL) was transferred for imminent default ahead of a Dec. 6 maturity.
Liam Mulcahy is senior product manager for CRE data and applied AI at CRED iQ.
