KBRA Releases Research – CMBS Loan Performance Trends: September 2025

NEW YORK--(BUSINESS WIRE)--KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the September 2025 servicer reporting period. The delinquency rate among KBRA-rated U.S. private label CMBS decreased to 7.7% in September from 7.9% in August. However, the total delinquent plus current but specially serviced loan rate (collectively, the distress rate) remained stable at 10.7%. The office delinquency rate decreased 90 basis points (bps) this month to 12.3%. Most of the office loans that became current this month remain with the special servicer, which is why the office distress rate did not fall. Among KBRA-rated loans, 1211 Avenue of the Americas ($1 billion in AOTA 2015-1211) became a performing matured balloon after a three-year modification and extension was closed last month.

In September, CMBS loans totaling $2.1 billion were newly added to the distress rate, of which 40% ($823.4 million) involved imminent or actual maturity default. The office sector experienced the highest volume of newly distressed loans (42.1%, $866.5 million), followed by mixed-use (19.1%, $393.4 million) and retail (16.8%, $345.3 million).

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

• The delinquency rate decreased to 7.7% ($25.2 billion) from 7.9% ($26.1 billion) in August.
• The distress rate remained stable at 10.7% ($34.9 billion).
• The office delinquency rate fell 90 bps this month to 12.3%. Most of the office loans that became current this month remain with the special servicer. Among KBRA-rated loans, 1211 Avenue of the Americas ($1 billion in AOTA 2015-1211) became a performing matured balloon as a three-year modification and extension was closed last month. Federal Center Plaza ($130 million in COMM 2013-CR6) and One Shell Square ($103.4 million in two conduits) became performing matured balloons this month. The borrower for Federal Center Plaza was granted a 12-month forbearance, which was announced in May. The workout strategy for One Shell Square is yet to be determined after the borrower failed to repay the loan at its July 2025 maturity date.
• The mixed-use delinquency rate increased 82 bps this month to 12.3%, driven by 650 Madison Avenue ($339.4 million in eight KBRA-rated conduits), which became 30-59 days delinquent. The servicer’s commentary indicated that collections for the loan payment are in process.
• The retail sector reversed course and recorded a 37-bp increase in its delinquency rate as loans totaling $569.3 million became delinquent this month, of which $525.4 million was already with the special servicer. Pembroke Lakes Mall ($260 million in GSMS 2013-PEMB), Sunvalley Shopping Center ($133.9 million in MSBAM 2012-CKSV), and Mall St. Matthews ($120.5 million in two conduits), all of which are with the special servicer, became nonperforming matured balloons. Ten smaller loans ranging from $2.6 million to $20 million totaled $54.9 million also contributed to the total.

In this report, KBRA provides observations across our $336.6 billion rated universe of U.S. private label CMBS including conduits, single-asset single borrower, and large loan transactions.

Click here to view the report.

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About KBRA

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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