At a glance
- Some 93% of that balance was past maturity or within six months of it, Commercial Observer reported.
- The $205 million CMBS loan on 2400 Market Street in Philadelphia moved to a special servicer on Sept. 29 for imminent default ahead of its Dec. 9 maturity.
- For debt allocators, the new distress is concentrated in office loans: 16.4% of office debt is distressed, office accounts for 44% of all distressed balance, and modification and rescue capital are the near-term work.
CRED iQ property alerts flagged $4.5 billion of conduit and single-asset, single-borrower CMBS debt as newly delinquent or newly in special servicing in October. Some 93% of that balance was past maturity or within six months of it, Commercial Observer reported. Office accounted for $1.5 billion, hotels $1.1 billion, retail $700 million and industrial $500 million. The national CMBS distress rate edged up to 11.2% from 10.9% a year earlier.
The $205 million CMBS loan on 2400 Market Street in Philadelphia moved to a special servicer on Sept. 29 for imminent default ahead of its Dec. 9 maturity. The building is 99.5% occupied and its largest tenant, Aramark, has a lease that runs to 2034; the servicer is pursuing a modification.
For debt allocators, the new distress is concentrated in office loans: 16.4% of office debt is distressed, office accounts for 44% of all distressed balance, and modification and rescue capital are the near-term work.
Office led October's CMBS distress alerts
Newly delinquent or newly special-serviced CMBS debt flagged in October, $B
- Office$1.5B
- Hotels$1.1B
- Retail$0.7B
- Industrial$0.5B
Show as table
| Item | Value ($B) |
|---|---|
| Office | $1.5B |
| Hotels | $1.1B |
| Retail | $0.7B |
| Industrial | $0.5B |
New York's October failures were maturities
New York's CMBS distress rate fell to 11.2% from 12.5% a year earlier, level with the national rate, and its October alerts were maturity failures. The Essex, a $117 million loan on a mostly residential Manhattan building, went to a special servicer after the borrower said it could not repay at its Oct. 30 maturity. The $100 million loan on 60 Madison Avenue, an office building 58% occupied at year end, passed its Oct. 6 maturity while the borrower seeks an extension. The $231 million loan on 101 Hudson Street in Jersey City, 65% occupied, went unpaid at its Oct. 11 maturity.
| Market | CMBS distress, October 2026 | A year earlier |
|---|---|---|
| New York | 11.2% | 12.5% |
| Los Angeles | 14.6% | 9.4% |
| Chicago | 23.5% | 19.5% |
| Houston | 15.3% | 12.4% |
| National | 11.2% | 10.9% |
Office distress climbs in Los Angeles, Chicago and Houston
Los Angeles office distress more than doubled to 21.5% from 9.9%, and the $74 million Equitable Plaza loan missed an extended Oct. 6 maturity. The tower was last valued at $57.7 million against $150.5 million at origination, a 62% decline.
Chicago office distress is 32.6%, and the $54 million Executive Towers West loan in suburban Downers Grove, 63% occupied, went to a special servicer. Houston office distress rose to 31.5% from 21.9%, and three 2025 Houston multifamily loans totaling $93.5 million went 30 days delinquent in October.
The $321 million LBA 2024-7IND loan, on warehouses in 10 states, matured Oct. 9 without being repaid, and an extension is in process. The $325 million Fresno Fashion Fair loan went 30 days delinquent ahead of its Nov. 1 maturity.
The Dec. 9 maturity at 2400 Market is the next dated test: whether the modification closes first, on a building whose occupancy is not the problem.
Office distress runs far above the national rate
Share of office loan balance distressed, October 2026
- Chicago32.6%
- Houston31.5%
- Los Angeles21.5%
- National16.4%
Show as table
| Item | Value (%) |
|---|---|
| Chicago | 32.6% |
| Houston | 31.5% |
| Los Angeles | 21.5% |
| National | 16.4% |
Reported by the Real estate debt desk from Commercial Observer. Published . Corrections