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Delinquency rates in the commercial mortgage-backed securities (CMBS) space spiked to 7.03% in April—marking a level not seen since early 2021.

By the numbers: According to Trepp, the overall delinquency rate rose by 38 basis points from March and nearly 200 basis points YoY, bringing the delinquent balance to $41.9B in April. While 91.62% of loans remained current, early-stage delinquencies and loans past maturity—especially non-performing balloon loans at 2.50%—are climbing.

Zoom out: When including loans that have matured but are still paying interest, the adjusted delinquency rate hits 8.37%—unchanged from March but far more alarming beneath the surface.

Growing concern: Multifamily saw the sharpest month-over-month jump, rising 113 basis points to 6.57%—a fivefold increase from just 1.33% a year ago. Lodging wasn’t far behind, climbing 66 basis points to 7.85%. These two sectors, once considered relatively stable, are now among the fastest deteriorating.

Still the most troubled: Despite multifamily and lodging’s rapid rise, the office sector remains the most distressed, with delinquencies rising again to 10.28% in April. After a brief decline in February and March, April’s 52-basis-point increase signals that office pain remains persistent and unresolved.

A few bright spots: Retail showed some improvement, with delinquencies falling 70 basis points to 7.12%—still elevated, but moving in the right direction. Industrial remained the most stable asset class, dipping to 0.50% from 0.60% the prior month.

➥ THE TAKEAWAY

Big picture: The return to 7%+ delinquencies is a warning flare. With stress now creeping into multifamily and lodging, the CMBS market is no longer just an office story. Investors may need to rethink what qualifies as “defensive” in 2025’s evolving risk landscape.