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KBRA Releases Research – CMBS Loan Performance Trends: August 2025

28 Aug 2025   |   New York

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KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the August 2025 servicer reporting period. The delinquency rate among KBRA-rated U.S. private label CMBS increased to 7.9% in August from 7.5% in July. However, the total delinquent plus current but specially serviced loan rate (collectively, the distress rate) remained stable at 10.6%. The conduit multifamily delinquency rate increased 178 basis points (bps) month-over-month (MoM) to 7.2%, largely due to the Park West Village loan ($254 million in six KBRA-rated conduits including $66.5 million in rake certificates in BBCMS 2022-C17), which became delinquent.

In August, CMBS loans totaling $1.6 billion were newly added to the distress rate, of which 33.8% ($556.2 million) involved imminent or actual maturity default. The multifamily sector experienced the highest volume of newly distressed loans (40.8%, $672.3 million), followed by office (35.7%, $588.5 million) and retail (9.4%, $154.5 million).

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

  • The delinquency rate increased to 7.9% ($26.1 billion) from 7.5% ($24.6 billion) in July.
  • The distress rate remained stable at 10.6% ($35 billion).
  • The office delinquency rate increased 140 bps this month to 13.2%, marking a return to the sector’s upward delinquency trend following a temporary improvement in July. Among KBRA-rated loans, 1211 Avenue of the Americas ($1 billion in AOTA 2015-1211) and Federal Center Plaza ($130 million in COMM 2013-CR6) became nonperforming mature balloon this month. The 1211 Avenue of the Americas loan is pending a three-year extension but is 30 days past due. Federal Center Plaza, which had a 12-month forbearance announced in May, is also delinquent this month.
  • The mixed-use delinquency rate decreased 78 bps this month to 11.5%, driven by Parkchester Commercial ($54 million in CGCMT 2015-GC29), NYC REIT Mixed-Use Portfolio ($50 million in UBSCM 2018-C10), and Boca Hamptons Plaza Portfolio ($22.5 million in two KBRA-rated conduits), which all became current but remain with the special servicers.
  • The retail sector saw a 41-bp decrease in delinquency rate as 12 retail loans became current this month. However, the current but specially serviced rate increased 47 bps, resulting in a 6-bp increase in the distress rate. The four largest loans are The Mall of New Hampshire ($150 million in two KBRA-rated conduits), which was newly transferred to special servicing this month, Westfield Palm Desert Mall ($62.5 million in WFCM 2015-C27 (KBRA-rated) out of $125 million total), Mall St. Matthews ($120.2 million in two KBRA-rated conduits), and The Oaks Mall ($75.5 million in COMM 2012-LTRT). All four loans, along with six other smaller loans ranging from $2.6 million to $11.4 million, remain with the special servicer.

In the report, KBRA provides observations across our $329.6 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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