Delinquency rates for mortgages backed by commercial properties increased during the fourth quarter of 2024, according to the Mortgage Bankers Association’s (MBA) latest commercial real estate finance Loan Performance Survey. The share of loans that were delinquent increased for some property types, particularly office, lodging, retail and multifamily, but decreased for industrial properties.

Among capital sources, CMBS saw the highest loan delinquency rates at 5.3%. At the other end of the spectrum, loans from Fannie Mae and Freddie Mac saw a 0.6% delinquency rate.

“The delinquency rate for commercial mortgages increased during the final three months of 2024, with increases across most capital sources and property types,” said Mike Fratantoni, MBA’s SVP and chief economist. “The challenges facing different sectors vary – with office properties perhaps facing the most challenging combination of weaker fundamentals and stubbornly high interest rates. However, despite the current conditions, other property types continue to benefit from a relatively strong economy.”