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KBRA Releases Research – CMBS Loan Performance Trends: March 2026

1 Apr 2026   |   New York

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KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the March 2026 servicer reporting period. The 30+ day delinquency rate among KBRA-rated U.S. private label CMBS increased to 7.7% in March from 7.5% in February, while the distress rate (reflecting delinquent plus current-but-specially-serviced loans) was steady at 10.3%.

The multifamily sector saw a 92-basis point (bp) increase in its distress rate as 18 loans became delinquent. Twelve of the newly delinquent loans were securitized in eight deals in 2021-25 vintages. The largest of these is the $62.5 million Waterford Grove Apartments loan in MSBAM 2025-5C1, which also transferred to the special servicer for imminent monetary default. The borrower failed to obtain a Housing Finance Corporation (HFC) tax exemption by February 2026, which triggered a requirement for the borrower to pay down the principal balance under the terms of the loan agreement. The borrower’s failure to remit the required funds triggered the transfer. The other 17 multifamily loans had balances ranging from $3.1 million to $49.3 million, with an average of $20.5 million.

The industrial sector also experienced a nearly 100-bp current-but-specially-serviced rate increase in conduits due to the transfer to special servicing of the $145 million (across three conduits) National Warehouse & Distribution Portfolio for imminent default. The sole tenant, CVB Inc., filed for Chapter 7 bankruptcy in mid-2025.

Key observations of the March 2026 performance data are as follows:

  • The delinquency rate increased 20 bps to 7.7% ($25.5 billion) from 7.5% ($25 billion) last month.
  • The distress rate was steady at 10.3% ($34 billion).
  • The office delinquency rate was unchanged at 12.8%, while its distress rate decreased 27 bps. 65 Broadway ($151.5 million in three conduits) returned to the master servicer after a modification; One Shell Square ($102.1 million in two conduits) became performing matured balloon even as the special servicer continues to pursue foreclosure and workout discussions with the borrower; and 141 Livingston ($100 million in three conduits) became current and was returned to the master servicer after a modification and collection of three consecutive loan payments.
  • The multifamily sector saw a 92-bp increase in its distress rate as 18 loans became delinquent. Of these, 12 were securitized in 2021-25 vintages (eight deals), the largest of which was the $62.5 million Waterford Grove Apartments loan in MSBAM 2025-5C1. The 17 other loans have balances ranging from $3.1 million to $49.3 million and averaging $20.5 million.

In this report, KBRA provides observations across our $340 billion rated universe of U.S. private label CMBS, including conduits, single-asset single borrower (SASB), and large loan (LL) transactions.

Click here to view the report.

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KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

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