Dive Brief:
- The multifamily delinquency rate declined 76 basis points to 6.95% in May for non-agency CMBS loans, posting the largest drop in commercial real estate during the month, according to Trepp. Six months ago, it sat at 6.98%, and one year ago, it was 6.11%.
- The multifamily servicing rate also improved, dropping 57 bps to 8.51% in May, according to Trepp. Six months ago, it sat at 8.15%, and one year ago, it was 8.42%.
- The overall Trepp commercial real estate delinquency rate increased by 1 bps to 7.55% in May 2026, with the five largest newly delinquent loans coming from sectors outside of multifamily. Industrial rose 35 bps to 1.31%, and retail ticked 30 bps to 6.61%. Office fell 16 bps to 11.53% and lodging dropped 51 bps to 6.01%.
Dive Insight:
The improvement in non-agency CMBS multifamily delinquencies was driven by two large multifamily loans that cured, meaning they moved from non-performing back to performing in May, according to Stephen Buschbom, Trepp's head of applied research and analytics.
“The largest of those was The Cove at Tiburon, a $210 million loan backed by a 283-unit, garden-style apartment complex in Tiburon, California,” Buschbom said in emailed comments. “The second-largest cure was in a private CMBS transaction, so Trepp cannot disclose loan-level details on that asset.”
The loan for the Cove at Tiburon, a 33-building complex in Tiburon, California, was originally placed on the watch list in January 2025 due to its pending maturity. The waterfront property, originally constructed in 1967, was renovated in two phases between 2014 and 2018, according to Morningstar Credit.
While multifamily servicing and delinquency rates both improved in May, those movements aren’t necessarily related, according to Buschbom.
“Delinquency and special servicing are related, but they do not always move in lockstep. A loan can be current but still specially serviced, and a delinquency cure does not necessarily mean the loan immediately exits special servicing,” Buschbom said.
The overall Trepp CRE CMBS special servicing rate fell 51 bps in May to 10.86%, driven by the return of an office loan to the master servicer. That sector saw a 91 bps drop to 16.75%, while lodging fell 121 bps to 8.45%. Mixed-use declined 59 bps to 11.62%. Industrial rose 5 bps to 1.28%, and retail increased 1 bps to 13%.
However, the overall headline may mask some problems beneath the surface. “May also saw a steady flow of mid-sized office loans enter special servicing, along with multifamily portfolios, industrial assets, and select lodging properties, indicating that distress remains broadly distributed despite improvements in headline metrics,” according to Trepp.
Click here to sign up to receive multifamily and apartment news like this article in your inbox every weekday.
