CMBS Delinquency Rate Drops in June as Lodging Loans Drive Improvement

June's CMBS numbers improved thanks to lodging, but refinancing challenges remain.

Nina Dale
July 03, 2026

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Good morning. CMBS delinquency fell for the first time in months, dropping 20 bps in June. The headline improvement, however, masks persistent refinancing pressure across several property sectors.

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Market Snapshot

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*Data as of 07/02/2026 market close.

Delinquency Declines

CMBS Delinquency Rate Drops in June as Lodging Loans Drive Improvement

A major hotel loan cure helped pull CMBS delinquency lower in June, though rising stress in retail, multifamily and office signals the market remains far from out of the woods.

By the numbers: Trepp's overall CMBS delinquency rate fell 20 bps in June to 7.35%, while the seriously delinquent rate declined to 7.16%. But if performing matured balloon loans were included, the delinquency rate would jump to 9.53%, highlighting the growing weight of looming loan maturities.

Lodging leads the turnaround: Hotels posted the month's biggest improvement, with delinquency falling 79 bps to 5.22% after a large Florida hotel portfolio loan cured, and lodging payoffs outpaced new defaults. Industrial also improved, slipping 11 bps to 1.20% as cure rates outpaced new delinquencies.

Pressure builds elsewhere: Three major property sectors worsened in June. Retail saw the biggest increase, climbing 30 bps to 6.91% as several malls and outlet centers became newly delinquent. Multifamily rose 28 bps to 7.23%, reversing May's improvement, while office edged up to 11.57%, remaining the most distressed major property type.

Maturity risk remains front and center: The five largest newly delinquent loans totaled nearly $1B, spanning regional malls, a New York office complex, a Minneapolis mixed-use tower, and a Manhattan multifamily property. Notably, 65% of new delinquencies were non-performing matured balloon loans, underscoring ongoing refinancing challenges.

➥ THE TAKEAWAY

The refi problem: June's improvement was driven largely by one major hotel loan cure, not a broad market recovery. With office delinquency still above 11% and maturity-related distress mounting, refinancing risk remains CMBS's biggest challenge.

✍️ Editor’s Picks

Deal distortion: May's CRE investment sales rose 18% YoY, but megadeals masked weaker single-asset activity across most sectors, with office posting the sharpest decline.
Summer reading: Build your CRE library with the ultimate guide to 60+ must-read books for investors, brokers, developers, and real estate professionals at every stage of their career.
Portfolio spotlight: President Trump disclosed stakes in 70-plus real estate companies as ethics filings showed $2.2B in 2025 income, including $575M from real estate.
July streak: REITs have posted gains every July since 2008, with analysts expecting the winning streak to continue as technical momentum and seasonal trends support further upside.

🏘️ MULTIFAMILY

Funding setback: A federal judge blocked HUD's proposed homelessness funding overhaul, ruling the agency violated federal law by failing to properly assess its impact on housing providers and vulnerable populations.
Builder confidence: Multifamily developers expect construction conditions to improve over the next year despite persistent concerns that inflation will keep building costs elevated.
Supply overhang: A flood of new apartment deliveries continues to pressure South Central markets with softer rents and occupancy, though slowing construction points to improving fundamentals by 2027.

🏭 Industrial

Storage slowdown: Self-storage asking rents rose in May, but annual pricing remained negative across most major metros as elevated new supply continued to weigh on the sector.
Digital expansion: Realty Income joined a new venture to acquire more than $6B in Northern Virginia hyperscale data centers, deepening its push into digital infrastructure.
Platform bet: Centerbridge acquired a $750M stake in Merritt Properties, valuing the industrial owner at $3B and fueling its expansion in shallow-bay warehouses across the Southeast and Mid-Atlantic.

🏬 RETAIL

Retail resilience: DLC Management acquired Charlotte’s 127,000 SF Perimeter Woods shopping center for $36.6M, underscoring continued investor demand for open-air retail assets.
Strategic retrenchment: IQHQ sold a South San Francisco Costco Business Center for $32.8M as it delays plans for a neighboring life sciences development amid a weaker lab market.
Revival financing: CP Group secured $56.4M in C-PACE financing to modernize and redevelop Atlanta’s former CNN Center, now rebranded as The CTR.

🏢 OFFICE

Growth bet: Stripe is expanding its Chicago office to more than 222K SF at 350 N. Orleans St., marking a major commitment to the city as downtown office vacancy remains near record highs.
Legal boom: Law firms are rapidly expanding their office footprints across the U.S. as AI-driven demand, regulatory complexity and rising legal work fuel hiring and leasing activity.
HQ ownership: Barclays has acquired its 1M SF Canary Wharf headquarters for £750M, securing long-term control of its global office while reaffirming confidence in London's premier financial district.

🏨 HOSPITALITY

Travel resilience: Americans continue to prioritize travel despite inflation, geopolitical uncertainty and other economic headwinds, supporting steady tourism demand and stronger-than-expected hotel performance in 2026.
Brand reset: W South Beach will exit the Marriott brand, close for a major renovation and lay off 337 employees as new owner Reuben Brothers prepares to reposition the Miami Beach property.

📈 CHART OF THE DAY

Despite skepticism, early CoStar data shows the World Cup has given a significant boost to U.S. hotel performance, with host markets posting RevPAR growth of nearly 22%—more than double the national rate—driven primarily by higher room rates.

CRE Trivia (Answer)🧠

Lewis Ranieri. As a trader at Salomon Brothers, he helped transform home mortgages into tradable securities, connecting mortgage lending with global capital markets and helping launch the modern securitization industry.