If you own or operate commercial real estate, the credit landscape in 2026 is sending a clear signal: refinancing is getting harder, and borrowers who wait may find themselves with fewer options and less leverage. A new analysis published in GlobeSt confirms what many in the industry are already sensing — non-current commercial real estate loans are rising steadily across the country, spanning every major asset class and geography.
Here’s what the data show, what it means for CRE owners, and why now is the time to get ahead of your financing strategy.
The Credit Cycle Is Turning — Broadly
Since 2022, commercial real estate borrowers have operated in a fundamentally different environment. Interest rates rose sharply, underwriting tightened, and the cost of debt increased significantly across all property types. For several years, the full impact of those changes was masked by long loan durations and contractual structures that delayed defaults. That grace period is ending.
FDIC data now show a persistent and broad-based increase in “non-current” CRE loans — those 90 or more days past due or on nonaccrual status. This isn’t concentrated in one region or one property type. It’s showing up in construction loans, traditional commercial real estate, and increasingly in multifamily portfolios.
Construction Loans Are Under the Most Immediate Pressure
Across virtually every region, construction loans are showing the sharpest and earliest increases in delinquency. Projects that were underwritten during the low-rate era now face a different reality: higher carrying costs, slower lease-up timelines, and permanent financing that’s both more expensive and harder to secure. Cost inflation in labor, materials, and insurance has further eroded the equity cushions that once provided a buffer.
Importantly, the rise in delinquency rates isn’t just a reflection of shrinking loan balances. In many markets, loan balances have stayed flat or grown while the share of non-current loans has climbed. That tells us this is real credit deterioration, not just a statistical artifact.
Office and Commercial Assets: Structural, Not Just Cyclical
For traditional commercial loans — especially in major metropolitan markets with significant office exposure — the deterioration has been slower but more persistent. The shift to remote and hybrid work has structurally weakened demand in many office markets, compressing cash flows and pushing down valuations even as capitalization rates rise.
When cap rates adjust faster than net operating income, loan-to-value ratios move in the wrong direction, and covenant breaches and maturity defaults follow. Unlike a typical credit cycle, there’s no easy reversal on the horizon for office in many markets. Banks and borrowers alike are working through legacy positions, and the process is ongoing.
Multifamily: Late to the Cycle, But Accelerating
Multifamily held up longer than other sectors, supported in part by pandemic-era rental assistance programs and strong rent growth through 2022 and 2023. But beginning in mid-2024, non-current ratios began climbing noticeably, with the trend steepening into 2025.
New supply delivered at scale in many markets just as rent growth was slowing. Operating expenses — insurance, property taxes, labor — kept rising. Floating-rate borrowers faced interest rate resets that quickly compressed debt service coverage. The New York metro is the most severely impacted, but the directional trend is upward across every major region.
Geography Matters, But Everyone Is Affected
The magnitude of stress varies by market. San Francisco and New York show higher absolute levels of non-current loans, driven in part by office-sector weakness and complex institutional portfolios. Sunbelt markets like Dallas and Atlanta are seeing steady increases in construction and multifamily delinquencies tied to slower absorption and earlier-vintage underwriting assumptions. Smaller markets like Kansas City show some of the largest relative increases, where a handful of stressed credits can move the needle significantly.
The common thread across all of them: higher interest rates, asset-specific pressure, and the uneven but unmistakable migration of risk through bank balance sheets.
What This Means for Your Upcoming Refinance
Borrowers who approach their upcoming loan maturities without preparation will find banks less flexible, pricing less favorable, and the process more difficult than it was just a few years ago. That doesn’t mean financing isn’t available — it means that how you approach it matters more than ever.
This is where having an experienced intermediary in your corner makes a real difference.
At Wheeler Capital Partners, we know lenders who see your risk differently and with clearly worded presentations emphasizing the best attributes of your project, discussions center on the correct criteria. There is increased credibility with the lender who reviews a completed presentation answering questions before asked by the lender.
Whether you’re looking to refinance with your existing bank or evaluate alternatives, we bring the relationships and market knowledge to help you negotiate better rates, terms, and conditions on your behalf.
In a market where banks are managing balance sheet risk more carefully, borrowers who come prepared — Presenting to the favorable lenders with clear financials, a credible story, and the right advocate — are the ones who close on favorable terms. Those who wait, or go it alone, often don’t.
If you have a CRE loan maturing in the next 12–24 months, the time to start the conversation is now — not when the clock is running out. Contact Wheeler Capital Partners today to discuss your refinancing options.
Source: Bhavna Goyal and Zach Halpern, “Rising Non-Current CRE Loans Signal Broad Credit Deterioration,” GlobeSt, April 14, 2026.
