CRED iQ’s March analysis showed the CMBS loan distress rate down for the second month in a row. Now, the firm has released the CRE CLO distress trends—a combination of delinquency and transfers to special servicing—because it’s an important channel for financing using short-term floating-rate loans.
CLO distress fell a “meaningful” 160 basis points from 16.0% in February 2025 to 14.4% in March. The delinquency rate was down 30 basis points from 12.2% to 11.9%, so fewer loans were at least 30 days behind payment. The special servicing rate decreased 90 basis points from 9.4% to 8.5%.
That news is good, but the larger picture is more complex and concerning. Out of all the CRE CLO loans, a whopping 69.5% were past their maturity date and 37.3% were classified as “performing matured.” That portion was up 660 basis points from February. According to CRED iQ, the shift suggests that many loans are either under “extension options or negotiating month-to-month arrangements to avoid default.” That would likely be due to the high interest rates and tighter capital availability that have made refinancing a challenge.
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