Sector Hot Spots Emerge for CMBS Default Risk in 2026

Top-line CMBS delinquency rates moved higher through 2025 and are expected to remain range-bound in 2026, as strong issuance continues to offset rising dollar volumes of delinquent loans, Trepp reported. Although the overall delinquency rate ended 2025 at 7.30%, office remained the most stressed sector, peaking at an all-time high of 11.76% before closing the year at 11.31%, while multifamily delinquencies rose to 6.64%. 

Breaking down 2026 CMBS default risks by property type, Trepp noted that 345 office loans with a balance of $13.72 billion are due to mature by year’s end. Within that universe, an area of concern for refinancing is the $2.38 billion of office CMBS with DSCRs of 1.09x or less.

Looking at the retail sector, the $119.81 billion of CMBS loans have an overall delinquency rate of 7.06%. However, that rate increases to 11.2% for mall properties.

Among the $18.7 billion of maturing hotel CMBS, nearly 70% carry floating-rate loans, according to Trepp. The $5.71 billion of fixed-rate loans with coupons of less than 6% “could face challenges getting fully taken out, as they’ll be getting refinanced in a market where prevailing rates are much higher,” according to Trepp.

“With maturity defaults still dominating new delinquencies and elevated maturities extending through 2026 and 2027, stress is likely to remain uneven and concentrated in weaker assets, particularly in office,” Trepp summed up.

Pictured: The Mall at Partridge Creek in Clinton Township, MI, part of the collateral on a $606.6-million mortgage that’s currently in foreclosure.

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