CRE Loan Modifications: May–July 2026 Report
Summary. CRED iQ tracked 82 modified CMBS and CRE CLO loans with a combined $2.36 billion in outstanding balance from May through July 2026. The mix looks different than it did a few quarters ago: extend-and-pretend hasn’t disappeared, but it’s no longer the whole story. Forbearances and combination modifications are now carrying meaningful weight alongside straight maturity extensions, and the balance is concentrated in mid-size loans rather than mega-loans. The property type with the most modifying isn’t hotels or office anymore — it’s multifamily.
Overview of Recent Modification Activity
Of the $2.36 billion modified during the period, maturity date extensions remained the single largest category: 21 loans totaling $802.5 million, or 34.0% of modified balance (25.6% of the loan count). Forbearances followed at 15 loans and $514.0 million (21.8% of balance), while combination modifications — deals pairing an extension with other relief, such as a paydown, rate adjustment, or reserve requirement — accounted for 10 loans and $345.6 million (14.7% of balance). The remaining 36 loans, $695.4 million (29.5% of balance), fell into other or miscellaneous modification categories.
Taken together, extensions, forbearances, and combination mods — the categories most closely associated with lenders buying time on distressed collateral — made up 70.5% of modified balance this period, down from the near-universal “extend and pretend” theme of recent reports. Lenders appear to be reaching for a broader toolkit than a simple maturity push.
Modifications by Property Type
Multifamily loans led modification activity by a wide margin, a shift from the hotel- and office-driven distress of previous quarters:
- Multifamily: 35 loans totaling $1.14 billion (48.4% of modified balance)
- Hotel: 15 loans totaling $493.8 million (20.9%)
- Retail: 6 loans totaling $236.7 million (10.0%)
- Office: 17 loans totaling $226.2 million (9.6%)
- Mixed Use: 5 loans totaling $160.5 million (6.8%)
- Other: 3 loans totaling $67.6 million (2.9%)
- Industrial: 1 loan totaling $31.2 million (1.3%)
Multifamily’s rise to the top of the modification table is notable given the sector’s reputation for relative stability earlier in the cycle. Rate resets on floating-rate loans and slower rent growth in oversupplied metros appear to be catching up with borrowers who underwrote to more favorable financing conditions. Hotel remains a source of distress, at roughly a fifth of modified balance. Office, long the poster child for CRE distress, accounted for under 10% of modified balance this period — a smaller share than either multifamily or hotel.
Modifications by Loan Size
Unlike the prior report, where loans of $100 million or more drove the bulk of modified balance, mid-size loans dominate this period:
- $20M–$50M: 38 loans totaling $1.22 billion (51.7% of modified balance)
- $50M–$100M: 8 loans totaling $554.3 million (23.5%)
- $100M+: 2 loans totaling $280.0 million (11.9%)
- $10M–$20M: 18 loans totaling $275.1 million (11.7%)
- Under $10M: 16 loans totaling $28.8 million (1.2%)
Loans of $50 million and above make up 35.4% of modified balance, but the majority of activity — both by count and by dollars — now sits in the $20M–$50M range. The average modified loan balance was $28.7 million; the median was $23.1 million, reinforcing that this period’s distress is showing up in the broad middle of the market rather than in a handful of trophy-asset workouts.
Key Findings
The May–July 2026 data points to a modification landscape that’s broadening rather than concentrating. Multifamily has overtaken hotel and office as the property type generating the most modification activity, a reminder that distress rotates across sectors as financing conditions and local fundamentals shift. The loan-size distribution has also flattened: rather than a small number of massive loans accounting for most of the dollar volume, mid-size loans in the $20M–$50M band now carry the largest share of modified balance. And the modification toolkit itself looks more varied, with forbearances and combination structures closing the gap on the maturity extensions that once defined “extend and pretend.”
None of this means distress has eased — $2.36 billion in loans needed some form of relief over three months, and more than 70% of that balance came in the form of extensions, forbearances, or combination modifications built to buy borrowers’ time. But the shape of that distress has changed, and lenders and borrowers alike appear to be working from a wider set of options than a maturity date extension alone.
About CRED iQ. CRED iQ manages access to over $2.3 trillion of CRE loans and provides data analytics serving investors, lenders, and brokers in the commercial real estate sector.
Methodology note: Loan-level modification activity was aggregated from property-level servicer data by deal and loan ID. Where a single loan spans multiple properties, the loan was assigned to the property type representing the largest share of allocated balance. Loans with no usable property-level detail in the underlying data (14 loans, $582.4 million) were excluded from this report. The state map reflects property-level allocated balance rather than loan-level totals, since a single loan can span multiple states.
