The nation’s troubled office sector reached a record 11.08% delinquency rate in commercial mortgage-backed securities (CMBS) in June, according to Trepp, a provider of data, analysis and technology to the commercial real estate industry.
Trepp noted that the office sector previously set records with 11.01% of loans overdue or delinquent in December 2024 and a 10.7% rate in July 2012. The delinquency rate refers to the percentage of loans that borrowers have stopped making payments on for at least 30 days.
The office sector wasn’t the only commercial area facing difficulties in June, with four of the five main property types showing higher delinquency rates month over month.
Retail delinquency rates rose to 7.06% in June, up from 6.99% in May. Lodging’s delinquency rate has been volatile in recent months, rising 42 basis points to 6.81% in June, after dropping 146 basis points in May. The industrial sector rose slightly to a modest rate of 0.51%.
Multifamily was the only major commercial property type where delinquency rates fell, dropping 20 basis points to 5.91% in June. The overall U.S. CMBS delinquency rate in June rose to 7.13%, an increase of five basis points.
Trepp reported that 0.28% of troubled CMBS loans were delinquent for 30 days, down 21 basis points from May. The percentage of loans that were behind 60 days reached 0.39%, while those behind 90 days hit 0.59%. Foreclosures stood at 2.63%.
