The national CMBS distress rate edged up to 11.2 percent in October from 10.9 percent a year earlier. Distress is shifting away from New York but concentrating in other major cities.
New York's CMBS distress rate fell to 11.2 percent from 12.5 percent a year ago. However, New York properties continued to hit maturity walls in October. The Essex, a $117 million loan on a mostly residential Manhattan building, went to a special servicer after the borrower could not repay at its Oct. 30 maturity. The $100 million 60 Madison Avenue loan on an office building 58 percent occupied passed its Oct. 6 maturity as the borrower seeks an extension. The $231 million loan on 101 Hudson Street in Jersey City, 65 percent occupied, went unpaid at its Oct. 11 maturity.
Los Angeles CMBS distress rose to 14.6 percent from 9.4 percent. Office distress more than doubled to 21.5 percent from 9.9 percent. The $74 million Equitable Plaza loan missed its extended Oct. 6 maturity. The tower was last valued at $57.7 million, against $150.5 million at origination.
Chicago's CMBS distress rate rose to 23.5 percent from 19.5 percent. Office distress reached 32.6 percent. The $54 million Executive Towers West loan in suburban Downers Grove, 63 percent occupied, went to a special servicer.
Houston's CMBS distress rate rose to 15.3 percent from 12.4 percent. Houston office distress rose to 31.5 percent from 21.9 percent. Three 2025 Houston multifamily loans totaling $93.5 million went 30 days delinquent in October.
In October alone, CRED iQ flagged $4.5 billion of CMBS debt as newly delinquent or in special servicing, with 93 percent past maturity or within six months of it. Office accounted for $1.5 billion, hotels $1.1 billion, retail $700 million and industrial $500 million. Office is 16.4 percent distressed nationally and represents 44 percent of all distressed balance.
Industrial loans also faced pressure. The $321 million LBA 2024-7IND loan on warehouses in 10 states matured Oct. 9 without repayment, with an extension in process. The $325 million Fresno Fashion Fair loan went 30 days delinquent ahead of its Nov. 1 maturity, despite the mall being 97.6 percent occupied. A $746 million loan on more than 70 select-service hotels was transferred for imminent default ahead of a Dec. 6 maturity.
A $205 million CMBS loan on 2400 Market Street in Philadelphia, a 99.5 percent occupied building with Aramark as its largest tenant on a lease through 2034, moved to a special servicer on Sept. 29 for imminent default ahead of its Dec. 9 maturity. The servicer is pursuing a modification.