CRED iQ’s Analysis of CRE Balance Sheet Loans –Q2 2025 Update

CRED iQ’s analysis of the most recent banking data for the second quarter of 2025 provides a comprehensive snapshot of the U.S. banking industry’s financial health. Covering 4,421 FDIC-insured commercial banks and savings institutions, including community banks with total assets of $25 trillion, the report highlights stable but modestly declining profitability, resilient deposit growth, and generally favorable asset quality amid persistent pressures in select loan portfolios.

This summary draws from the report’s key findings, with a targeted focus on commercial real estate (CRE) metrics relevant to investors and lenders. While overall banking conditions remain sound, the report flags ongoing weaknesses in CRE segments like non-owner-occupied properties and multifamily, where delinquency rates exceed pre-pandemic averages (defined as Q1 2015–Q4 2019). These insights are particularly pertinent as they underscore potential risks in CRE lending amid elevated interest rates and economic uncertainty.

Key Industry Highlights

CRED iQ’s analysis provides detailed delinquency, and net loss metrics for loans as of June 30, 2025, segmented by property types. For CRE investors and lenders, the data reveals moderate stress in key subsectors—construction and development (C&D), Core CRE (e.g., office, retail, industrial, hotel), and multifamily—amid high borrowing costs and softening demand in segments like office. Total CRE loans outstanding reached approximately $3 trillion (sum of C&D, Core CRE, and multifamily), representing about 23% of all loans. Let’s dive into these CRE metrics for all FDIC-insured banking institutions.

Core CRE (Office, Retail, Industrial, Hotel) Performance

• 30-89 Days Delinquent: This delinquency bucket is at 0.27% for Core CRE, down from 0.34% from prior quarter, and in line with a year ago.  
• 90+ Days Delinquent:  The 90+ days delinquency bucket is at 1.38% for Core CRE, up slightly from 1.36% from prior quarter, and in line with a year ago.   Total balance of 90+ day delinquent loans amounts to $25.8 billion for the Core CRE asset group.
• Overall Delinquent: Combining these two delinquent buckets amounts to 1.65% overall, which is down 5 basis points from the quarter earlier.  A year ago overall delinquency for Core CRE was 1.62%, and was 0.75% in December 2019. 
• Net Losses:  Net losses across the Core CRE properties totaled $3.92 billion (0.21%) in Q2 2025, which is up slightly from $3.88 billion last quarter, and is down from $6.0 billion (0.33%) in Q2 2024, which represents the highest amount of losses since March 2012).

Multifamily Performance

• 30-89 Days Delinquent: This delinquency bucket is at 0.24% for multifamily loans, down from 0.42% from prior quarter, and down from 0.39% a year ago.  
• 90+ Days Delinquent:  The 90+ days delinquency bucket remains at 1.05% for multifamily loans, the same as prior quarter, but up significantly from a year ago (0.50%).   Total balance of 90+ day delinquent loans amounts to $6.8 billion for the multifamily asset group.
• Overall Delinquent: Combining these two delinquent buckets amounts to 1.29% overall, which is down 18 basis points from the quarter earlier.  A year ago overall delinquency for multifamily loans was 0.89%, and was 0.25% in December 2019. 
• Net Losses:  Net losses across the multifamily properties totaled $902 million (0.14%) in Q2 2025, which is up slightly from $767 million last quarter, and doubled the amount in (0.07%) in Q2 2024.  The highest quarterly amount of losses for multifamily totaled $2.66 billion in Q4 2010. 

Construction & Development Performance

• 30-89 Days Delinquent: This delinquency bucket is at 0.42% for C&D loans, down from 0.48% from prior quarter, and up from 0.40% a year ago.  
• 90+ Days Delinquent:  The 90+ days delinquency bucket remains at 0.84% for C&D, up from 0.81% the prior quarter, and also up significantly from a year ago (0.59%).  Total balance of 90+ day delinquent loans amounts to $3.94 billion for the C&D asset group.
• Overall Delinquent: Combining these two delinquent buckets amounts to 1.26% overall, which is up 3 basis points from the quarter earlier.  A year ago overall delinquency for C&D loans was 0.99%, and was 0.82% in December 2019. 
• Net Losses:  Net losses across the C&D assets totaled $375 million (0.08%) in Q2 2025, which is up slightly from $335 million last quarter, and up from $198 million (0.04%) in Q2 2024.  The highest quarterly amount of losses for C&D totaled $24.4 billion in Q4 2009.

Implications for CRE Investors and Lenders

CRED iQ’s Bank Data analysis underscores a bifurcated CRE landscape: While total loan growth supports optimism, elevated noncurrent rates in Core CRE (office-heavy) and multifamily highlight refinance risks in a high-rate environment. Investors should monitor large banks’ provisioning trends, as acquisitions could mask underlying weaknesses. For lenders, focus on mid-tier and regional institutions where 90+ Day Delinquent rates are rising, and stress-test portfolios against potential net losses increases. Community banks’ strong income growth offers opportunities for partnerships, but their higher CRE concentrations warrant caution. Overall, the industry’s stability mitigates systemic risks, but selective underwriting in stressed subsectors remains critical.

About CRED iQ

CRED iQ is a market data provider that offers a robust suite of data and software solutions tailored for commercial real estate and finance professionals.

With over $2.3 trillion of CRE loans, CRED iQ delivers instant access to a comprehensive range of financial data and analytics for millions of properties in every market. CRED iQ’s data and analytical capabilities are instrumental in helping investors, lenders and brokers make informed and strategic decisions critical to their business.

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