T
he latest Commercial Delinquency Report from the Mortgage Bankers Association (MBA) reveals a rise in commercial mortgage delinquencies during Q1 2025. According to Reggie Booker, MBA's Associate Vice President of Commercial Real Estate Research, "delinquency rates have increased across all major capital sources due to growing pressure on certain property sectors and loan types." While overall delinquency rates remain relatively low for most investor groups, the uptick in CMBS delinquencies signals heightened stress in areas lacking refinancing options or facing other challenges.

    The top five capital sources - commercial banks and thrifts, life insurance companies, Fannie Mae, and Freddie Mac - account for about 80% of outstanding commercial mortgage debt. Each group's metrics for monitoring loan performance are included in MBA's analysis, but delinquency rates are not directly compared due to differences in tracking methods.

    Delinquency rates for each group at the end of Q1 2025 were as follows:

    * Banks and thrifts: 1.28%, an increase of 0.02 percentage points from Q4 2024;

    * Life insurance companies: 0.47%, up 0.04 percentage points from Q4 2024;

    * Fannie Mae: 0.63%, a rise of 0.06 percentage points from Q4 2024;

    * Freddie Mac: 0.46%, an increase of 0.06 percentage points from Q4 2024; and

    * CMBS: 6.42%, up 0.64 percentage points from Q4 2024.

    Construction and development loans, often backed by single-family residential projects, are included in regulatory definitions but not typically in these numbers.