Weekly Real Estate News
Commercial mortgage delinquency rates increased modestly during the third quarter of 2026, with loans held in commercial mortgage-backed securities showing the highest rate of distress among the major investor groups tracked by the Mortgage Bankers Association.
In its Commercial Real Estate Finance Loan Performance Survey released October 27, MBA reported that 4.97% of CMBS loan balances were at least 30 days delinquent at September 30, up from 4.82% in the second quarter.
The share of delinquent loans held by life insurance companies rose to 1.33% from 1.19%, while the delinquency rate for government-sponsored enterprise portfolios increased to 1.16% from 1.11%. The FHA portfolio moved in the opposite direction: its rate declined to 0.90% from 1.06%.
Office Properties Remain Under Pressure
MBA said office properties continued to exhibit the highest delinquency rates among property types. The results were mixed across other commercial real estate sectors, illustrating that borrower performance depends heavily on property fundamentals and financing structures.
“Challenging fundamentals, particularly in the multifamily and office markets, along with higher rates, are having an impact on performance,” said MBA Senior Vice President and Chief Economist Mike Fratantoni in the association’s release.
Fratantoni cautioned that a substantial pipeline of scheduled loan maturities, combined with elevated borrowing costs, could remain a headwind in coming quarters. At the same time, he noted that delinquency rates remain historically low across most capital sources.
A Broad View of Commercial Mortgage Performance
The survey includes approximately $3 trillion in commercial and multifamily mortgages as of September 2026, representing about 59% of the estimated $5 trillion in outstanding debt at the end of the second quarter.
The figures measure loan performance through September 30, not conditions arising after the quarter ended. They also use separate portfolios for different capital sources, so the percentages should not be interpreted as a single delinquency rate for the entire commercial mortgage market.
Simple Content Summary
MBA reports that commercial mortgage delinquencies rose modestly in the third quarter of 2026. CMBS loans had the highest rate, at 4.97%, while office property loans remained under pressure. MBA warned that refinancing costs and upcoming loan maturities could weigh on performance.
