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In August, the CMBS distress rate across the 20 largest markets was 7.2%, slightly higher than the national CMBS 2.0 rate of 6.8%. According to Kroll Bond Rating Agency (KBRA), this figure – which covers both delinquent and specially serviced loans – rose from 4.5% nationally in June 2022.

Seven MSAs had a distress rate above 10%, with Chicago topping out at 22.7%. Denver, Philadelphia, San Francisco and Houston followed close behind while seven other markets had rates lower than 2% (Orlando, San Jose, Phoenix, Miami Boston Seattle and San Diego). 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 across all twenty locations with only three having distressed industrial loans (New York City Chicago & Philadelphia). The highest levels of property type related distress were found in New York for Retail (17%), Denver for Office(40%) Houston for Mixed Use(75%) &San Francisco Lodging/Multifamily respectively at 59&22 percent .