The aggregate CRE delinquency picture masks significant divergence by capital source, property type, and lender size—pointing to pockets of stress rather than a broad-based credit crisis.
Key Takeaways
- Headline delinquency increased, but the move was modest. Commercial and multifamily mortgage balances that were non-current rose 16 bps to 4.02% in Q1 2026, while bank-held CRE delinquency was essentially unchanged at 1.56%. The difference reflects both the underlying loan populations and varying delinquency definitions.
- CMBS remains the clearest capital-source pressure point: CMBS delinquency increased 24 bps to 5.21%, while life company delinquencies edged lower. GSE and FHA multifamily/healthcare posted larger quarterly increases, but from much lower starting levels.
- Office is where property-level stress is most concentrated. Office CMBS delinquency stands at 11.58%—well above retail, multifamily, lodging, and industrial—and remains highest even after excluding REO.
- Bank-level trends are diverging by lender size. CRE delinquency fell 16 bps year over year at the 100 largest commercial banks but rose 17 bps at banks outside the top 100, even as the overall bank rate remained essentially flat.
- The data point to pockets of stress—not a broad CRE credit crisis. Bank CRE delinquency of 1.56% remains far below the 8.76% GFC-era peak, reinforcing that today’s risk is concentrated by financing source, property type, and lender segment rather than system-wide.
CRE Delinquency by Property Type — Q1 2026
| Property Type | Current Balance | Delinquency | Delinquency excl. REO | Watchlist | DSCR < 1 |
|---|---|---|---|---|---|
| Office | $189.8B | 11.58% | 9.45% | 25.47% | 14.43% |
| Retail | $114.5B | 6.98% | 5.54% | 22.12% | 5.42% |
| Lodging | $93.7B | 5.68% | 4.02% | 24.83% | 14.32% |
| Multifamily | $95.6B | 6.54% | 6.08% | 22.89% | 7.81% |
| Industrial | $74.8B | 0.89% | 0.87% | 33.04% | 3.57% |
Data as of Q1 2026. Source: Mortgage Bankers Association CREF Loan Performance Survey; Trepp Trends and Rankings. Prepared by the Kidder Mathews Research Group.
CRE Delinquency by Bank Group — Q1 2025–Q1 2026
| Bank Group | Q1 2025 | Q4 2025 | Q1 2026 | YoY Change |
|---|---|---|---|---|
| All Commercial Banks | 1.57% | 1.58% | 1.56% | -1 bp |
| 100 Largest Commercial Banks | 1.94% | 1.83% | 1.78% | -16 bps |
| Banks Outside Top 100 | 1.08% | 1.20% | 1.25% | +17 bps |
Data as of Q1 2026. Source: Federal Reserve Board via FRED. Prepared by the Kidder Mathews Research Group.
Frequently Asked Questions
What is the current CRE delinquency rate in Q1 2026?
Commercial and multifamily mortgage balances that were non-current rose 16 bps to 4.02% in Q1 2026, while bank-held CRE delinquency was essentially unchanged at 1.56%.
Which property type has the highest CMBS delinquency rate?
Office has the highest CMBS delinquency rate at 11.58%, well above retail (6.98%), multifamily (6.54%), lodging (5.68%), and industrial (0.89%), and it remains highest even after excluding REO.
How does CMBS delinquency compare to bank-held CRE delinquency?
CMBS delinquency increased 24 bps to 5.21% in Q1 2026, more than three times the 1.56% delinquency rate held by banks overall.
Are large or small banks seeing more CRE stress?
Trends are diverging by lender size: CRE delinquency fell 16 bps year over year at the 100 largest commercial banks but rose 17 bps at banks outside the top 100.
Is CRE delinquency approaching Great Financial Crisis levels?
No. Bank CRE delinquency of 1.56% remains far below the 8.76% GFC-era peak, indicating today’s stress is concentrated by financing source, property type, and lender segment rather than system-wide.
ContactGARY BARAGONA |
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