Lodging drove March’s jump in CMBS delinquencies, adding to mounting pressure on multifamily and office
Commercial mortgage‑backed securities (CMBS) performance deteriorated again in March, with Trepp reporting the overall delinquency rate rose 41 basis points to 7.55%, reversing February’s brief improvement.
Lodging and multifamily joined office as key pressure points, reinforcing concerns that stress broadened beyond a single property type.
Trepp’s latest report showed four of the five major CMBS property types posted higher delinquency rates. Lodging surged 137 basis points month‑over‑month to 7.31%, “the first time it has been above 7% since its recent April 2025 peak of 7.85%,” the firm said.
Office delinquency climbed to 11.71% after a 51‑basis‑point increase, while multifamily rose 30 basis points to 7.15%, edging past its October 2025 high watermark.
Industrial remained comparatively resilient at 0.65%.
Trepp also highlighted the role of loan maturities in driving distress. If loans that passed maturity but remained current on interest were included, “the delinquency rate would register 9.07%, up 32 basis points from February,” the report said, with non‑performing matured balloons the most common classification among newly delinquent loans.
Roughly 40% of March’s newly delinquent loans have been performing matured balloons a month earlier, underscoring how many borrowers are struggling to refinance on time.
Market participants have been warning that delinquencies are building. In a 2025 interview with Mortgage Professional America, Nathan Cohen, head of CRE at LBC Capital Income Fund, said “the issue of delinquencies [was] smoldering” and “going to be a massive problem,” pointing in particular to the lodging and warehouse sectors as areas to watch.
Those comments appeared increasingly prescient as hotel portfolios and multifamily assets featured prominently among March’s largest new CMBS problem loans.
For lenders, servicers and B‑piece buyers, even as origination volumes recover and some bank balance‑sheet metrics stabilise, refinancing risk and property‑type bifurcation remain central to CMBS underwriting.
With lodging back above 7% and multifamily setting new records, the cycle’s next phase looks less about isolated office pain and more about how far stress might spread across the broader commercial mortgage stack.
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