Office is still the weak spot in commercial real estate lending. According to CRED iQ data published by Commercial Observer on September 28, 2026, the delinquency rate on office loans in commercial mortgage-backed securities reached 13.2% in August 2026. That is the highest reading since at least 2019, up from 8.1% in July 2024, and roughly 1.6 times the 8.2% rate across all property types.
The share of office loans in special servicing, where a loan goes when it needs a workout, climbed to 15.7%, also the highest since at least 2019.
The problem is the maturity date
Most of this distress isn't owners missing monthly payments. CRED iQ found that 71% of distressed office loan balance is tied to a failed or imminent refinancing. In the past year, 51% of office loans moved to special servicing were still current when they transferred, typically about 11 months before maturity.
Even full buildings aren't immune. Several failed refinancings involved fully leased, single-tenant properties, where one lease decision can change the whole picture.
More maturities are coming
About $39 billion of office CMBS matures over the next 12 months. CRED iQ flags $13.9 billion of it as not yet distressed but already showing warning signs, such as weak debt coverage, falling occupancy, or a recent watchlist addition.
What it means for owners and buyers
- Owners with loans maturing: start the refinancing conversation a year or more ahead. Lenders and servicers are acting earlier, and so should you.
- Know your tenant risk: a lease expiring near your loan maturity can matter more than today's occupancy.
- Buyers: refinancing pressure brings office and mixed-use properties to market. The best opportunities go to buyers who can underwrite the building, the leases, and the site quickly.
Sources
This article is general market commentary for property owners and investors. It is not investment, legal or tax advice. Figures are as reported by the sources above on the dates shown.
