Dive Brief:
- The multifamily delinquency rate increased 30 basis points month over month to 7.15% in March, pushing slightly above its previous high of 7.12% in October 2025. One year ago, it sat at 5.44% and two years ago, it was 1.84%.
- The bulk of the defaults were concentrated in New York and New Jersey, with 48% of delinquent loan balances, and Houston, at 30%, Stephen Buschbom, head of applied research and analytics at Trepp, told Multifamily Dive in emailed comments. “That's nearly 80% of the new distress concentrated in just two markets,” he said.
- The multifamily CMBS special servicing rate increased 45 bps MOM to 8.75% in March, according to a separate report from Trepp. Six months ago, it was 8.2%, and 12 months ago it was 8.31%.
Dive Insight:
Most of the new multifamily delinquencies in March were term defaults, not maturity defaults, according to Buschbom. He said that is a reversal of the pattern the firm has been tracking over the past two years or so.
“The weighted average remaining term on newly delinquent multifamily loans this month was just over three years, meaning these borrowers aren't struggling because their loans are coming due or because they're staring down a near-term refinancing event,” Buschbom said.
Instead, the borrowers are defaulting mid-term, “which points to property-level fundamentals, such as occupancy pressure, operating cost inflation, market-specific demand softening, or idiosyncratic property-specific issues such as the expiration of a tax break, rather than the capital markets friction that drives most maturity defaults,” according to Buschbom.
While apartment CMBS loans have shown stress, with several properties across the country transferred to special servicing in the past month, originations from the government-sponsored enterprises are holding up better, according to Trepp.
Less than one-quarter (22.94%) of outstanding GSE balances have a DSCR below 1.4x, which is generally considered a meaningful operating cushion. However, loans originated between 2022 and 2023 account for more than 32% of the outstanding balance, with DSCRs below 1.4x. Loans originated in 2022 have the greatest exposure, with a higher proportion of loans at DSCR below 1.0x.
“Recent vintages are not signaling imminent distress. However, they are structurally positioned to experience pressure sooner than other cohorts if revenue growth slows and expense growth remains elevated,” according to Trepp.
Properties across the commercial real estate universe are also facing stress.
After declining in February, the Trepp CMBS Delinquency Rate for all commercial real estate increased by 41 bps MOM to 7.55% in March 2026. Lodging jumped 137 bps MOM to 7.31, posting the largest increase. Office rose 51 bps MOM to 11.71, and industrial fell 2 bps MOM to 0.65%
The Trepp CMBS Special Servicing overall rate increased by 27 bps MOM in March to 11%, driven mainly by six large office loans.
Overall, CMBS special servicing in the office sector increased 44 bps MOM to 16.73%. Lodging fell 43 bps MOM to 9.58%, mixed‑use declined 30 bps MOM to 12.19% and retail dropped nine bps MOM to 12.99%, according to Trepp.
Click here to sign up to receive multifamily and apartment news like this article in your inbox every weekday.
