Office loans backing commercial mortgage-backed securities (CMBS) hit a new record delinquency rate in July 2026, according to Fitch Ratings. The share of delinquent office CMBS climbed to 8.89%, edging past the previous all-time high of 8.83% set in September 2012. The rate was also significantly higher than the 8.0% office delinquency level recorded one year earlier, underscoring sustained stress in the sector.
Fitch reported that the overall U.S. CMBS delinquency rate rose to 3.49% in July, up 16 basis points from 3.33% in June. The increase was driven primarily by new office delinquencies and the default of a large mixed-use single-asset, single-borrower (SASB) loan. These developments highlight how weakness in office fundamentals and stress in complex mixed-use structures are feeding through to bond performance.
New 60-plus day CMBS delinquencies accelerated during the month. Fitch measured new delinquency volume at $2.82 billion in July, compared with $2.09 billion in June. Office loans accounted for the largest share of that new volume at 40%, or $1.12 billion. Mixed-use followed at 26%, or $728 million, with multifamily loans contributing 14%, or $405 million, and retail loans 10%, or $274 million. The data indicate that while office remains the most stressed category, credit deterioration is also present across other major property types.
Fitch further broke down the nature of the new problem loans. Term defaults made up 67% of new delinquencies, totaling $1.88 billion. The remaining 33% of new delinquencies were tied to maturity defaults, where borrowers did not repay or refinance at scheduled loan maturity. This mix suggests that both ongoing cash-flow challenges during the loan term and refinancing hurdles at maturity are contributing to elevated CMBS credit risk.
At the same time, the pace of resolving distressed CMBS loans slowed modestly. Resolution volume decreased to $1.54 billion in July from $1.63 billion in June. Within July resolutions, $785 million consisted of loan liquidations in which assets were sold or otherwise disposed of. Another $677 million reflected loans that were brought current, indicating that some borrowers were able to cure past-due amounts. In addition, $77 million of loans that had been 60 or more days delinquent improved to 30 days delinquent and were therefore removed from Fitch’s delinquency index.
The combination of higher office delinquency rates, growing new delinquency volume and slightly lower resolution activity signals a more challenging environment for CMBS credit performance, particularly in office and mixed-use exposures. While some borrowers are successfully returning loans to current status, the market is contending with an elevated level of stressed assets relative to historical peaks.
