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Multifamily and Office CMBS Most Distressed Despite Overall Rate Decline

Retail and hotel segments diverge, suggesting optimism and caution, respectively.

By Erik Sherman | April 07, 2025 at 02:51 AM

The overall distress rate for CMBS dropped for the second month in a row, according to CRED iQ, down 20 basis points to 10.6%. Four property categories saw lower distress rates; one was flat, and another had a higher distress rate.

As a reminder, CRED iQ considers distress a combination of delinquency and special servicing. The delinquency rate went from 8.0% in February to 7.9% in March; it was 5.4% in March 2024. The special servicing rate saw a 40-basis-point improvement from 10.1% to 9.7% and was 7.4% a year prior. The firm says the recent improvements suggest that “while challenges persist, the market may be finding its footing in select areas.”

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