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In August, the distress rate for CMBS loans across the 20 largest markets was 7.2%, slightly higher than the national CMBS 2.0 rate of 6.8%. This increase from 4.5% in June 2022 was seen across most MSAs, with seven exhibiting rates over 10%. Chicago had the highest at 22.7%, followed by Denver, Philadelphia, San Francisco and Houston respectively; while Orlando, San Jose Phoenix Miami Boston Seattle and San Diego all had a distress rate lower than 2%.

All but one MSA experienced an increase in office distress rates during August; however lodging rates decreased in 16 of 20 markets while retail multifamily and mixed-use assets showed varied performance among these top twenty cities – only three (New York Chicago & Philadelphia) having distressed industrial loans to report on.. New York led with 17% retail distress whereas Denver topped 40% office stress levels; Houston reported 75.5 % mixed-use problems whilst San Francisco saw 59 .3 % lodging issues alongside 22 .7 % multifamily difficulties..

Overall it is clear that despite some areas seeing decreases or low levels of stress overall there are still many areas where caution should be taken when investing into commercial real estate backed securities