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Multifamily Delinquencies Climb to Post-GFC High

Multifamily Delinquencies Climb to Post-GFC High

As delinquencies rise, nearly $911M in quarterly losses signal mounting strain.

Nina Dale
February 23, 2026

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Good morning. Multifamily delinquencies have climbed to their highest levels in years, with serious defaults driving the increase. Losses are beginning to follow as the credit cycle shifts.

Today’s issue is sponsored by OnDeck—scale your team with institutional real estate talent on demand starting at $4k/month.

🎙️This Week on No Cap: Matt Brody of Canyon Partners breaks down where real estate credit is moving—from looming maturities to quiet distress and today’s recap opportunities.

CRE Trivia 🧠

Which metro area has the highest concentration of Spring Training stadium investment in the U.S.?

(Answer at the bottom of the newsletter)

Market Snapshot

S&P 500

GSPC

6,909.51

Pct Chg:
+0.69%

FTSE NAREIT

FNER

821.62

Pct Chg:
+0.79%

10Y Treasury

TNX

4.086%

Pct Chg:
+0.011

SOFR

30-DAY AVERAGE

3.66%

Pct Chg:
-0.00

*Data as of 2/20/2026 market close.

Rising Stress

Multifamily Delinquencies Climb to Post-GFC High

Multifamily credit stress has moved from early warning signs to measurable strain, with bank-reported delinquencies and losses climbing at the fastest pace since the post-GFC recovery.

By the numbers: CRED iQ reports that multifamily delinquency at community, commercial, and savings banks hit 1.37% in Q3 2025, the highest level since the post-GFC recovery. That’s up from 0.40% in Q3 2023 and 0.97% in Q3 2024, with delinquent balances climbing from $2.4B to $8.9B in just two years.

Concentrated stress: Most of the distress sits in loans 90 days or more past due, which account for 1.09% of balances, or roughly $7.1B. Early-stage delinquencies are comparatively modest at 0.28%, suggesting the bigger issue is loans that have already moved deep into default.

Losses gaining momentum: Loss rates have risen from near-zero levels in the pre-2022 period to 0.14% in Q3 2025, equating to about $911M in losses in a single quarter. While still well below GFC peaks, the pace of deterioration is faster this cycle, driven by floating-rate exposure and value declines tied to 2021–2022 vintages.

What is means for CRE: Lenders are now facing a growing pipeline of resolutions, from restructurings to note sales, as serious delinquencies accumulate. Investors and brokers may find opportunity in rising distress, but disciplined underwriting and market-level insight will be critical.

➥ THE TAKEAWAY

Stress test: Multifamily fundamentals remain relatively sound, but the credit cycle has clearly shifted. Stress is no longer emerging — it’s established — and the next 12 to 24 months will center on how effectively the market works through it.

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✍️ Editor’s Picks

ICSC+PROPTECH: The event showcasing the innovation that's driving ROI for CRE takes place during ICSC LAS VEGAS, the world’s largest CRE event, May 18th - 20th. (sponsored)
Nation’s landlord: Invitation Homes, the nation’s largest single-family rental landlord, plans to shift to net selling in 2026 to fund stock buybacks after years of buying and upgrading homes.
Tokenization blocked: Barry Sternlicht says Starwood is ready to tokenize real-world assets but U.S. regulatory uncertainty is preventing the launch.
Ban blueprint: The White House is offering new details on its push to ban housing investors, proposing to block firms that own more than 100 single-family homes from buying additional properties.
Record revenue: Cushman & Wakefield reported record annual and Q4 revenue with sales and leasing momentum and plans for further earnings growth in 2026.
Tariff takedown: The Supreme Court struck down Trump’s use of emergency powers to impose tariffs, invalidating billions in duties.
Quantitative tightening: The Fed’s $2.4T balance sheet reduction has done little to tighten financial conditions, casting doubt on QT’s effectiveness today.

🏘️ MULTIFAMILY

Owner mix: Census data show individual investors still own about 60% of single-family rentals, despite growing institutional focus.
Eligibility crackdown: HUD has proposed requiring all members of assisted households to prove legal status, a move critics say could trigger over 100,000 evictions from mixed-status families.
Waldorf sequel: PMG is planning a 985-foot Delano-branded condo tower in Miami, doubling down on supertalls as it nears completion of its Waldorf Astoria project.
Regional split: South Central rents will be mixed in 2026, with Houston and San Antonio slipping slightly while markets like Oklahoma City and Tulsa grow 3%+.

🏭 Industrial

Pricing shift: Parcel shipping is moving from periodic rate resets to dynamic pricing where rates recalibrate with demand, capacity, and shipper characteristics.
Drone merger: Eric Trump invested in a $1.5B merger between Florida’s JFB Construction and Israel-based XTEND, which has a U.S. Defense Department contract.
Queens logistics: Terreno bought the College Point Logistics Center in Queens for $92M, with total investment expected to reach $103M.

🏬 RETAIL

UPREIT buy: KM Realty acquired a three-property Houston-area retail portfolio valued at $17M with no debt, adding $17M of equity to its balance sheet.
Store fulfillment: Walmart said global online sales rose 24% in Q4, and 35% of U.S. store-fulfilled online orders were delivered in under three hours.
Lease fight: Saks Global is contesting Simon Property’s attempt to terminate two store leases at locations in New York and California.
Chapter 11: Bankrupt furniture chain American Signature is liquidating about 90 stores and warehouses nationwide, putting the properties on the market for retail and industrial reuse.

🏢 OFFICE

Delinquency peak: Trepp said office CMBS delinquency hit an all-time high, with the rate at 12.34% in January 2026.
Leasing record: U.S. law firms set a record 18.8M SF of office leasing in 2025, with renewals overtaking new deals late in the year.
Amentum move: Amentum signed a 45,000 SF lease to relocate its HQ from Chantilly to Reston, marking its second HQ move in three years.

🏨 HOSPITALITY

Elite eviction: Core Club’s finances are under scrutiny as landlord Michael Shvo pushes for eviction, alleging rent defaults and conflicting claims about the elite club’s ability to pay.
Resort sale: Host Hotels sold its Four Seasons resorts in Orlando and Jackson Hole for $1.1B, capitalizing on strong demand for high-end travel.

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📈 CHART OF THE DAY

Renewal lease rents have climbed 3.6% as of early 2026, outpacing largely flat move-in rents since Spring 2023.

CRE Trivia (Answer)🧠

The Phoenix metro area — home to all 15 Cactus League teams, with billions invested in stadiums and training complexes over the past three decades.

Multifamily Delinquencies Climb to Post-GFC High

As delinquencies rise, nearly $911M in quarterly losses signal mounting strain.