October CMBS Distress Rate Reaches 11.4%, Nears Record High

Commercial mortgage-backed securities (CMBS) investors tracking distress signals saw the CRED iQ distressed rate rise 13 basis points (bps) in October to 11.41 percent, reversing half of September’s 50 bps decline and inching closer to the cycle peak. 

Our analysis covers approximately $600 billion in private-label CMBS conduit and single-asset, single borrower (SASB) loans, providing a granular view of sector performance and loan-level risks. The delinquency rate held steady at 8.59 percent, while the specially serviced rate increased 38 bps to 11 percent. This uptick reflects ongoing resolution challenges, particularly for matured loans. CRED iQ’s distress rate combines any loan with the special servicer or 30 days delinquent or worse.  

Office continues to dominate distress at 17.5 percent, driven by hybrid work trends and maturing debt. Hotels (10.4 percent) and multifamily (10.3 percent) remain elevated but have improved since March, benefiting from seasonal demand and rent growth stabilization. 

Retail’s 9.2 percent distressed  rate edges higher amid e-commerce pressures. In contrast, industrial (1.5 percent), manufactured housing (1.8 percent) and self-storage (0.1 percent) operate with minimal stress, underscoring their resilience in a high-rate environment.

The shift toward non-performing matured loans signals mounting extension risks and potential forced sales ahead of 2026 maturities. For investors, these metrics highlight selective opportunities in underperforming offices and hotels, while favoring allocations to industrial and self-storage. 

Mike Haas is the founder and CEO of CRED iQ.