Trepp reported that the overall CMBS delinquency rate moved lower in October 2026, helped by the resolution of a single large loan. The all-property delinquency rate declined 15 basis points during the month to 7.87%, down from 8.02% in September, reversing part of the recent upward pressure on securitized loan performance.
The primary driver of the improvement was a $975 million loan that returned to current status. The loan is secured by a portfolio of showroom properties located in High Point, NC, and Las Vegas, and its shift out of delinquency had an outsized impact on the headline CMBS rate given its large balance within the securitized universe.
Despite the overall improvement, October brought a new wave of stress in the office sector. Office loans accounted for the bulk of newly delinquent balances during the month. Among the largest new problem loans were a $384.3 million office loan in Los Angeles and a $210 million apartment loan in the San Francisco Bay Area, illustrating that distress is not confined to a single property type or geography.
The five biggest loans that became newly delinquent in October included several prominent office assets and one lodging property. Those loans were backed by office towers in Chicago, Los Angeles, and Washington, DC; an office portfolio that spans Washington, DC and Northern Virginia; and a hotel property in New Orleans. The mix of collateral underscores that both single-asset office towers and multi-property portfolios are contributing to CMBS performance volatility.
Delinquency rates by property type moved in different directions over the month. Retail exhibited the sharpest deterioration, with its CMBS delinquency rate rising 63 basis points to 7.21%. Office delinquencies also climbed, increasing 17 basis points to 12.33%, reinforcing office as the most stressed major sector. Multifamily recorded a smaller uptick, with its delinquency rate edging up five basis points to 8.09%.
Two sectors saw improvement in October. Lodging delinquencies fell 24 basis points to 5.94%, while industrial posted a four-basis-point decline to 1.10%, maintaining the lowest delinquency level among the major property types. These shifts highlight the growing divergence in credit performance, with industrial and lodging showing comparatively better loan health while retail, office, and multifamily face mounting pressure in CMBS pools.
Taken together, the October data shows how the performance of a single large loan can meaningfully move the overall CMBS delinquency rate, even as underlying stress remains elevated in several property types. The figures also emphasize that sector-level trends are increasingly bifurcated, with industrial and lodging showing resilience and office, retail, and multifamily continuing to generate new delinquencies.
