In July, the $536 million loan on Chicago’s Aon Center reached maturity and wasn’t repaid. The tower, appraised at $824 million when the loan was securitized, is now valued at $195 million. A three-year extension request \u201cwas unequivocally denied,\u201d according to servicer commentary.<\/p>\n\n
Chicago is the weakest real estate market in this year’s postseason. As of August, 25.3% of Chicago’s outstanding CMBS balance was delinquent or in special servicing, according to CRED iQ. That is the highest of the 11 playoff metros and up 4.7 percentage points in a year.<\/p>\n\n
Nationally, the CMBS distress rate was 10.9% in August, down from 11.5% a year earlier. Preliminary September numbers point to a similar 10.8%. The steady headline masks office, which accounts for 45.5% of distressed balance and whose distress rate climbed to 16.0%. Office is the top source of distress in eight of the 11 playoff metros.<\/p>\n\n Cleveland (22.5%) and Milwaukee (22.4%) join Chicago at the bottom. In Cleveland, $414 million of distressed debt sits within a mile of Progressive Field, led by Key Center, in special servicing since 2020. Milwaukee’s distress centers on Southridge Mall, where the value has fallen 74%.<\/p>\n\n Philadelphia (16.3%) is weighed down by three loans on Market Street West, at 1500, 1700 and 1818 Market, totaling $779 million and 40% of the metro’s distress. Houston (16.0%) rose 3.3 points as One & Three Allen Center, a $470 million loan on a 71%-occupied complex, moved to special servicing and six apartment loans became distressed this summer. Los Angeles (11.8%) jumped in August when the $1.1 billion ICON\/Hollywood Media Portfolio loan transferred ahead of maturity; 20 LA loans totaling $2.5 billion became distressed this summer.<\/p>\n\n New York’s rate fell 2.9 points to 9.6% as $6.1 billion of loans cured, including 1211 Avenue of the Americas ($1.035 billion) and One New York Plaza ($810 million). Worldwide Plaza, with its value down 74%, remains the biggest problem. Atlanta fell to 7.5% from 14.2%, helped by the payoff of a $580 million hotel portfolio loan.<\/p>\n\n San Diego is the cleanest market in the postseason at 0.3% distressed, with the Hotel del Coronado and a 98%-occupied Fashion Valley mall among its largest loans. In Tampa (6.0%), one asset, the 27%-occupied Westfield Countryside mall, accounts for 62% of distress. Boston (5.6%) is dominated by a single life-science loan that remains current.<\/p>\n\n The national rate is an average of very different markets. Midwestern office cores are still deteriorating, New York is healing, and in the healthiest cities a few buildings decide the score. For lenders, the question isn’t who wins the pennant. It’s which loans come due next.<\/p>\n\n Source: CRED iQ proprietary loan-level analytics, August 2026. Conduit and SASB\/SBLL CMBS. Distress rate is the share of outstanding balance that is delinquent or in special servicing. September 2026 figures are preliminary.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Both Chicago teams made October. Chicago’s office towers didn’t. How commercial real estate is holding up in the 11 playoff metros. In July, the $536 million loan on Chicago’s Aon Center reached maturity and wasn’t repaid. The tower, appraised at $824 million when the loan was securitized, is now valued at $195 million. A three-year […]<\/p>\n","protected":false},"author":14,"featured_media":5480,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","footnotes":""},"categories":[2,9],"tags":[],"class_list":["post-5479","post","type-post","status-publish","format-standard","has-post-thumbnail","category-news","category-research"],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/posts\/5479","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/comments?post=5479"}],"version-history":[{"count":2,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/posts\/5479\/revisions"}],"predecessor-version":[{"id":5482,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/posts\/5479\/revisions\/5482"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/media\/5480"}],"wp:attachment":[{"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/media?parent=5479"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/categories?post=5479"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/tags?post=5479"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n \n
Metro<\/th> Team(s)<\/th> Distress Rate<\/th> Change vs. Aug 2025<\/th> Primary Driver<\/th><\/tr>\n <\/thead>\n San Diego<\/td> Padres<\/td> 0.3%<\/td> \u22120.8 pts<\/td> None (all types under 2%)<\/td><\/tr>\n Boston<\/td> Red Sox<\/td> 5.6%<\/td> +0.1 pts<\/td> Mixed-use \/ life science<\/td><\/tr>\n Tampa<\/td> Rays<\/td> 6.0%<\/td> \u22121.4 pts<\/td> Retail<\/td><\/tr>\n Atlanta<\/td> Braves<\/td> 7.5%<\/td> \u22126.7 pts<\/td> Office<\/td><\/tr>\n New York<\/td> Yankees<\/td> 9.6%<\/td> \u22122.9 pts<\/td> Office<\/td><\/tr>\n Los Angeles<\/td> Dodgers<\/td> 11.8%<\/td> +3.5 pts<\/td> Office<\/td><\/tr>\n Houston<\/td> Astros<\/td> 16.0%<\/td> +3.3 pts<\/td> Office<\/td><\/tr>\n Philadelphia<\/td> Phillies<\/td> 16.3%<\/td> \u22120.2 pts<\/td> Office<\/td><\/tr>\n Milwaukee<\/td> Brewers<\/td> 22.4%<\/td> +2.7 pts<\/td> Office<\/td><\/tr>\n Cleveland<\/td> Guardians<\/td> 22.5%<\/td> +2.4 pts<\/td> Office<\/td><\/tr>\n Chicago<\/td> Cubs, White Sox<\/td> 25.3%<\/td> +4.7 pts<\/td> Office<\/td><\/tr>\n U.S. CMBS<\/strong><\/td> <\/td> 10.9%<\/strong><\/td> \u22120.5 pts<\/strong><\/td> Office<\/strong><\/td><\/tr>\n <\/tbody>\n<\/table>\n The bottom of the bracket<\/h2>\n\n
The middle innings<\/h2>\n\n
The comeback stories<\/h2>\n\n
The top seeds<\/h2>\n\n
The takeaway<\/h2>\n\n