CMBS Delinquencies Hit Record With $25B Past Maturity

After nearly three years of pushing off maturities in hopes that rates would fall and office cash flow would rebound, the market’s long-running game of “extend and pretend” is reaching a point of being played out, as lenders are beginning to call billions of dollars in troubled loans due.

The delinquency rate for office loans packaged into commercial mortgage-backed securities climbed to a record 12.34 percent in January, the highest since Trepp began tracking the metric in 2000. The Wall Street Journal reported that the spike reflects a hardening view among creditors: Pandemic-era rates aren’t coming back, and hybrid work isn’t a blip.

More than half of the roughly $100 billion in securitized commercial mortgages coming due this year are unlikely to pay off at maturity, according to a January report from Morningstar DBRS. That’s a sharp drop from recent years, when payoff rates topped 80 percent in 2023 and roughly 75 percent in 2024 and 2025.

Close to $25 billion in CMBS loans are now past maturity without repayment, liquidation or formal extension, according to Trepp — levels not seen since the post-2008 recession cleanup. Overall, the U.S. carries nearly $5 trillion in commercial real estate debt, with banks and thrifts holding about 36 percent and CMBS accounting for roughly 15 percent, according to the publication.

One high-profile example: the $515 million mortgage on the upper portion of the former New York Times Building in Midtown Manhattan. Owner Brookfield Asset Management — who owns half of the 52-story, 1.5 million-square-foot office tower at 620 Eighth Avenue — extended the loan five times since 2020 before it was transferred to a special servicer late last year as a major tenant prepares to depart. The firm says it has opened a “structured good-faith dialogue” with lenders.

The pain is not evenly distributed, as industrial and grocery-anchored retail continue to post steadier numbers. CMBS issuance hit $125.6 billion in 2025, up 21 percent year over year and the strongest annual total since before the financial crisis.

But for loans originating between 2019 to 2021, refinancing can mean a jump of more than 300 basis points — a gap many borrowers can’t stomach, the outlet reported, with more handing back the keys.

Regional banks that leaned into commercial real estate during the last cycle are now in the crosshairs. While the largest money-center institutions have so far sidestepped major fallout, smaller lenders are entering what some analysts call the peak of distress.

— Eric Weilbacher