Dive Brief:

• The multifamily delinquency rate decreased nine basis points month over month to 6.85% in February, 27 basis points below its October 2025 high of 7.12%, according to a report from data firm Trepp. Six months ago, it sat at 6.86%, and a year ago, it was 4.46%.
• The multifamily CMBS special servicing rate increased 16 bps MOM to 8.3% in February, according to a separate report from Trepp. Six months ago, it was 8.61%, and 12 months ago it was 8.51%.
• The CMBS delinquency picture for commercial real estate improved as modifications and extensions of five large office loans and four large mall loans helped ease the pressure. Seven office and three mixed-use loans transferred out of special servicing. However, a large retail loan moving into servicing nearly canceled that.

Dive Insight:

The Trepp CMBS Delinquency Rate for commercial real estate fell 33 bps MOM to 7.14% in February. The office rate fell 114 bps from January’s all-time high to 11.2%, and retail decreased 74 bps to 6.3%. Lodging increased 38 bps to 5.94%, while industrial ticked up 5 bps to 0.67%.

The Trepp CMBS Special Servicing Rate declined 18 bps MOM in January to 10.73%. The mixed‑use servicing rate fell 118 bps to 12.49%, and office declined 82 bps to 16.29%. Industrial remained unchanged at 0.85%, while retail jumped 133 bps to 13.09%. The lodging rate increased 64 bps to 10.01%.

In a separate report, Cred iQ expects office distress, including loans outside the CMBS universe, to reach 13% or 14%. It says multifamily continues to see elevated delinquency pressure due to the wave of floating-rate bridge loans originated in 2021 and 2022. However, moderating secured overnight financing rates could provide relief.

Even as multifamily delinquencies and servicing rates have risen over the past year, the “massive wall of distress” many people were anticipating hasn’t materialized, according to RealPage Chief Economist Carl Whitaker.

“I think that was a big fear that was maybe overstated a little bit, understandably, going into this down cycle,” Whitaker told Multifamily Dive. “Where it is happening is more with groups that are overleveraged in already performance-challenged areas.”

Whitaker said distress could still increase in places like Florida, Phoenix, Houston, Denver and Austin, Texas. 

“I do think that we'll see a little bit more distress popping up this year, but I think it'll largely be B-minus to class-C product in select markets.”

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