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KBRA Releases Research – CMBS Loan Performance Trends: December 2025

2 Jan 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 December 2025 servicer reporting period. The delinquency rate among KBRA-rated U.S. private label commercial mortgage-backed securities (CMBS) decreased to 7.7% in December from 7.8% in November, while the distress rate (the total delinquent plus current-but-specially-serviced loan rate) ticked up to 10.6% from 10.5%. The lodging sector registered the largest increase in delinquency this month at 37 basis points (bps), but its distress rate declined the most as well this month (33 bps). Industrial, after a period of strong performance history, logged the second-highest increase in delinquency and distress rates for the month.

In December, CMBS loans totaling $1.3 billion were newly added to the distress rate, of which 40.1% ($524.3 million) involved imminent or actual maturity default. The retail sector experienced the highest volume of newly distressed loans (26.6%, $346.9 million), followed by office (21.6%, $281.9 million) and multifamily (17.8%, $232.3 million).

Key observations of the December 2025 performance data are as follows:

  • The delinquency rate decreased by 8 bps to 7.7% ($25 billion) from 7.8% ($25.5 billion) last month.
  • The distress rate edged up to 10.6% ($34.4 billion) from 10.5% ($34.5 billion) last month.
  • The office delinquency rate decreased 54 bps this month to 11.8%. The 32 Avenue of the Americas loan ($142.5 million in two KBRA-rated conduits and $282.5 million in three non-KBRA rated conduits) became performing this month after it was modified and extended to November 2027. The borrower committed new cash equity as part of the modification, but the loan remains with the special servicer. Five loans ranging from $70 million to $130 million also became current this month, but all remain with the special servicer.
  • The “other” property type category recorded a 75-bp increase in distress rate after several loans became delinquent or transferred to the special servicer. OZRE Leased Fee Portfolio ($97.6 million in three KBRA-rated conduits and $12.5 million in a non-KBRA rated conduit) was transferred to the special servicer for imminent monetary default ahead of its February 2026 maturity date. The Wind Creek Leased Fee loan ($56.5 million in two KBRA-rated conduits and $77.9 million in two non-KBRA rated conduits) also turned 30+ days delinquent in December.

In this report, KBRA provides observations across our $334.8 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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