By Maddy McCarty | BisNow
The delinquency rate of U.S. CMBS loans will rise more than expected this year and next, eclipsing the Global Financial Crisis peak in 2025, according to a new national office report.
Fitch Ratings on Friday increased its U.S. CMBS office delinquency forecast to 8.4% for 2024 and 11% for 2025. The office delinquency rate was 4.3% in April, meaning it will nearly double by year’s end, according to the report. The new peak predictions are up from the 8.1% for 2024 and 9.9% for 2025 that Fitch projected at the start of this year.
The office delinquency rate peaked at 8.1% during the GFC.
Fitch doubled down on its “deteriorating” outlook for the U.S. office sector through the end of this year, citing higher interest rates, slower economic growth, a tighter lending environment and “a secular decline in office demand.” These factors make it even harder to refinance, pushing more loans into delinquency and special servicing.
