Delinquency rates for mortgages backed by commercial properties increased slightly during the first quarter according to the Mortgage Bankers Association’s (MBA) latest commercial real estate finance (CREF) Loan Performance Survey.
The share of loans that were delinquent increased for office and lodging, decreased for industrial and retail properties, and remained roughly constant for multifamily properties overall.
“The delinquency rate for commercial mortgages increased again in the first quarter of 2025, driven by higher delinquencies on lodging and industrial properties and rising delinquencies on GSE and FHA loans,” says Judie Ricks, associate vice president of commercial real estate research for the MBA, in a statement. “MBA is closely watching delinquency trends, as there have been increases in both later-stage and new delinquencies. Economic growth will slow in 2025, which could lead to further increases in mortgage delinquencies through the second half of the year.”
Among capital sources, CMBS loan delinquency rates saw the highest levels.
About 5.2% of CMBS loan balances were 30 days or more delinquent, down from 5.3% at the end of last quarter.
Non-current rates for other capital sources remained moderate.
About 1.0% of life company loan balances were delinquent, up from 0.9% in the fourth quarter.
About 0.6% of GSE loan balances were delinquent, up from 0.55% the previous quarter.
Roughly 1.1% of FHA multifamily and health care loan balances were delinquent, up from 1.0% the prior quarter.
Photo: Étienne Beauregard-Riverin
