Multifamily CMBS Delinquencies Decline, But CRE Challenges Persist in May

A new report from Trepp reveals that multifamily commercial mortgage-backed securities (CMBS) loan delinquencies for apartments fell 46 basis points to 6.57% in May, marking a significant improvement compared to the 1.70% rate a year ago. The multifamily CMBS special servicing rate also declined 17 basis points to 8.42% in May, down from 5.43% a year ago.

However, the picture wasn’t as positive for commercial real estate (CRE) as a whole in May. Issues in the office sector drove monthly rates up, with commercial real estate delinquencies ticking up 5 basis points to 7.08% in May, while the special servicing rate increased 13 basis points to 10.30%.

CRED iQ’s distress rate also showed an uptick in CRE problem loans, which rose from 10.3% in April to 11.0% in May. The delinquency rate rose by 40 basis points to 8.4%, while CRED iQ’s special service number increased by 30 basis points to 10.2%.

The Mortgage Bankers Association’s (MBA) first-quarter Commercial Delinquency Report found that delinquencies increased across all major capital sources in the first quarter of 2025, reflecting growing pressure on certain property sectors and loan types. “Commercial mortgage delinquencies rose across all major capital sources in the first quarter of 2025, reflecting growing pressure on certain property sectors and loan types,” said Reggie Booker, MBA’s associate vice president of commercial real estate research, in a news release published earlier this month.

Looking at delinquency by investor, the report shows that while delinquency rates remain relatively low for most investor groups, the uptick in CMBS delinquencies signals heightened stress in parts of the market that lack refinancing options or other challenges. Banks and thrifts had a 90-day or in accrual delinquency rate of 1.28%, while life company portfolios had a 60-day delinquency rate of 0.47%. Fannie Mae and Freddie Mac both had a 60-day delinquency rate of 0.46% and 0.63%, respectively. CMBS had a 30-day or in REO (Real Estate Owned) delinquency rate of 6.42%.

In conclusion, while there are signs of improvement in the multifamily CMBS market, challenges persist for commercial real estate as a whole, particularly in the office sector. To stay informed on multifamily and apartment news like this article, sign up to receive our free daily Multifamily Dive newsletter.