(Editor's Note: This report is S&P Global Ratings' monthly summary update of U.S. CMBS delinquency trends.)
Key Takeaways
- The overall U.S. CMBS delinquency rate rose 59 bps month over month to 6.1% in April.
- By balance, delinquency rates increased for lodging (138 bps to 6.7%), multifamily (87 bps to 5.6%), and office (56 bps to 8.9%), and decreased for retail (68 bps to 6.1%) and industrial (10 bps to 0.5%).
- Special servicing rates rose for lodging, multifamily, retail, and industrial, and decreased for office. Meanwhile, the share of loans that were either modified or extended increased 10 bps to 8.6%.
- Our delinquency rate does not include performing matured balloon loans, which represent 129 loans (1.5% by balance).
The Overall Delinquency Rate Increased 59 Basis Points (Bps)
In this report, S&P Global Ratings provides its observations and analyses of the U.S. private-label commercial mortgage-backed securities (CMBS) universe, which totaled $665.3 billion as of April 2025 (a net decrease of $3.0 billion month over month). The overall U.S. CMBS delinquency rate (DQ) increased 58.6 bps month over month to 6.1% in April and 143 bps year over year. By dollar amount, total delinquencies were $40.35 billion, representing a net month-over-month increase of $3.74 billion (10.2%) and year-over-year increase of $11.1 billion (38.2%) (see charts 1A and 1B).
Lodging loan delinquency rates jumped to 6.7%--the highest level since February 2022. Meanwhile, multifamily loan delinquency rates reached the highest level since December 2015, but they are still well below the all-time high of 16.0% in January 2011. After three months of consecutive decreases, office DQ rates rose to 8.9% in April.
Performing matured balloon loans represented 129 loans (1.5% by balance). Although these loans did not pay off at their maturity date, they are technically not delinquent on debt service payments. Therefore, we did not include them in our overall delinquency rate.
Chart 1A
Chart 1B
Several Large Loans Moved Into Delinquency
The overall DQ rate increased in April with an additional 156 loans ($7.4 billion) becoming delinquent. Table 1 shows the top five newly delinquent loans by balance.
Table 1
| Top five newly delinquent loans in April 2025 | ||||
|---|---|---|---|---|
| Property | City | State | Property type | Delinquency balance ($) |
| Workspace Property Trust Portfolio | Various | Various | Multiple | 1,059,758,350 |
| Innkeepers Portfolio | Various | Various | Lodging | 727,419,781 |
| JPMCC 2021-NYAH Portfolio | Various | New York | Multifamily | 506,300,000 |
| Selig Office Portfolio | Seattle | Washington | Office | 379,100,000 |
| Times Square Plaza | New York | New York | Multiple | 335,000,000 |
Workspace Property Trust Portfolio was the largest loan to move into delinquency in April. The $1.3 billion loan is secured by the borrower's fee simple and leasehold interests in a portfolio of 146 suburban office and light industrial, research and development, and flex industrial properties. The properties comprise nearly 10.0 million sq. ft. and are located in 14 major metropolitan markets across the U.S. As of June 2024, the net cash flow debt service coverage ratio was 1.10x, a 16.7% decrease from 2023. This is primarily due to a 7.5% decline in effective gross income, which was driven by a 9.1% drop in base rent that is linked to an approximately 3.3% decrease in occupancy to 76.0%. In addition, total operating expenses rose 5.0% due to a significant increase in repairs and maintenance costs. The loan was returned to the master servicer on Oct. 1, 2023, and subsequently transferred to special servicing on Nov. 13, 2024, due to shortfalls in the cash management account. The special servicer is working with the borrower to resolve the issue.
Delinquent And Modified Or Extended Loans
Modified loans represented approximately 8.6% ($57.1 billion) of the $665.3 billion total U.S. CMBS outstanding balance as of April. The share of loans that were either modified or extended increased 10 bps month over month to 8.6%. Table 2 shows the top five modified loans by balance.
By sector, lodging had the highest modification rate (16.1% by balance). However, this standout rate is more a function of the legacy modifications that were allowed soon after the onset of the COVID-19 pandemic; it is not an accurate indicator of current sector stress. In addition, the modification rate for lodging has seen a significant decline of 7.9% since April 2024. In contrast, the modification rate for office loans had the most significant increase during the same period, rising by 3.1%.
Retail loans had the second-highest modification rate (13.2%), reflecting a mix of modifications granted due to the pandemic and, of more concern, loans commonly backed by retail malls that are unable to refinance and, therefore, cannot receive extensions.
The 8.1% modification rate for office loans indicates that the DQ rates for this sector would be notably higher if CMBS servicers weren't granted modifications. Chart 2 shows the breakout of the DQ rate and modified loan rate by property type.
Chart 2
Prime Storage Fund II, a $340.0 million first-lien, floating-rate, interest-only whole mortgage loan, was the largest loan modified in April. The loan consists of nine notes that are secured by 21 self-storage properties (71.8% of the loan balance) and one mixed-use property (28.2%), comprising 14,746 units across 12 states. The loan was transferred to the special servicer on Dec. 10, 2024, due to its maturity on Oct. 9, 2024. In December, the borrower indicated that it wanted to extend the loan maturity to October 2025, as provided for in the loan documents. In early February, the special servicer granted the extension, and the loan will be returned to the master servicer.
Table 2
| Top five modified loans in April 2025 | ||||
|---|---|---|---|---|
| Property | City | State | Property type | Outstanding balance ($) |
| Prime Storage Fund II | Various | Various | Various | 340,000,000 |
| Times Square Plaza | New York | New York | Various | 335,000,000 |
| 20 Broad Street | New York | New York | Multifamily | 198,000,000 |
| Southfield Town Center | Southfield | Southfield | Office | 118,936,456 |
| Duane Morris Plaza | Philadelphia | Philadelphia | Office | 105,300,000 |
The Special Servicing Rate Increased By 16 Bps
The overall special servicing rate increased 16 bps month over month to 9.2% in April (see charts 3A and 3B). By sector, the special servicing rate rose for lodging (116 bps to 8.9%), and multifamily (35 bps to 7.4%), retail (33 bps to 10.4%), and industrial (7 bps to 0.6%), and decreased for office (56 bps to 13.9%). The overall special servicing rate remains below the 9.5% peak of September 2020.
The largest loan to move into special servicing in April was Innkeepers Portfolio. The loan matured in November 2024, but a modification was executed concurrently that extended the loan's modeled maturity date to May 2025. The loan was transferred to special servicing for imminent balloon/maturity default. The special servicer is currently collaborating with the borrower to address this default.
Chart 3A
Chart 3B
DQ Rates Decreased For Retail And Industrial
By balance, the overall DQ rate increased for lodging (138 bps to 6.7%; 138 loans; $6.6 billion), multifamily (87 bps to 5.6%; 128 loans; $4.5 billion), and office (56 bps to 8.9%; 401 loans; $15.1 billion), and decreased for retail (68 bps to 6.1%; 261 loans; $7.4 billion) and industrial (10 bps to 0.5%; 23 loans; $289.8 million). Charts 4A and 4B show the historical DQ rate trend by property type.
There were 156 newly delinquent loans totaling $7.4 billion in April, led by office (50 loans; $1.5 billion), retail (34 loans; $787.3 million), lodging (23 loans; $2.1 billion), multifamily (16 loans; $950.5 million), and industrial loans (five loans; $60.5 million).
By property type, DQ composition rates increased year over year for multifamily (to 11.22% from 3.95%) and industrial (to 0.72% from 0.66%). Meanwhile, rates decreased for lodging (to 16.48% from 17.45%), office (to 37.50% from 40.59%), and retail (to 18.37% from 22.04%).
Charts 5A and 5B show the year-over-year change in the property type composition for delinquent loans.
Chart 4A
Chart 4B
Chart 5A
Chart 5B
Table 3
| Top five loans that moved out of delinquency in April 2025 | ||||
|---|---|---|---|---|
| Property | City | State | Property type | Outstanding balance ($) |
| Natick Mall | Natick | Massachusetts | Retail | 450,730,519 |
| Santa Monica Place | Santa Monica | California | Retail | 300,000,000 |
| PFHP Portfolio | Various | Various | Lodging | 236,000,000 |
| 90 Fifth Avenue | New York | New York | Multiple | 104,500,000 |
| 500 Fifth Avenue | New York | New York | Office | 98,402,650 |
This report does not constitute a rating action.
| Primary Credit Analyst: | Senay Dawit, New York + 1 (212) 438 0132; senay.dawit@spglobal.com |
| Secondary Contacts: | Mei Yolles, New York +1 (212) 438-0307; mei.yolles@spglobal.com |
| Tamara A Hoffman, New York + 1 (212) 438 3365; tamara.hoffman@spglobal.com | |
| Lourdes Karam, Chicago +1-312-233-7022; Lourdes.Karam@spglobal.com | |
| Research Contact: | James M Manzi, CFA, Washington D.C. + 1 (202) 383 2028; james.manzi@spglobal.com |
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