Shafiq Hirani CCIMReal Estate Advisor, REMAX Distinctive · Real Estate Advisor at RE/MAX Distinctive Commercial | Washington, DC | Your Guide To Profitable Real Estate Ventures

CMBS Distress Jumps: Lending Against Today's Income #shorts

16 Aug 2026 · 1 min

Watch on YouTube

1:25

In this YouTube short, Shafiq Hirani CCIM reports that Trepp’s CMBS distress rate rose to 7.86% in July, with about $65 billion of loans maturing by year‑end and office distress near 12%. He emphasizes that lenders now underwrite multifamily loans based on current property income rather than future cap‑rate improvements, making it essential for owners to protect and improve their Net Operating Income (NOI). Hirani illustrates this with a case study of a 12‑unit building where, instead of cutting rents in response to new competition, the owner focused on tenant retention, faster unit turn‑overs, and strategic lease renewals, preserving occupancy and NOI. He concludes with three actionable steps for owners: (1) pull the last 12 months of vacancy and turnover data, (2) benchmark those numbers against direct local competitors—not national averages—and (3) use that insight to drive operational improvements.

Chapters

Trepp reported the CMBS distress rate jumped to 7.86% in July. Roughly $65 billion in loans mature by year-end, and more than half of those properties will need fresh borrower equity to refinance. Office is the epicenter at nearly 12% distress. But here is the line every apartment owner should hear: lenders are sizing loans around current property income instead of betting on future cap rate compression. That is the whole message of this channel in one sentence, coming from the lending market itself. Nobody is going to give you credit for what your building might earn later. They are lending against what it earns today. That is why work on your NOI is no longer optional. Quick example: Marcus owns a 12-unit building. When new construction opened nearby with concessions, his instinct was to cut rents to compete. Instead, we focused on retention and turn efficiency, fixing the maintenance issues driving tenants out, tightening turn times, and timing renewals thoughtfully. He held occupancy without a race to the bottom on price, and his NOI held with it. Here is what I would do this week. 3 things. One, pull your own vacancy and turnover numbers for the last 12 months and compare them to your direct competitors, not to the national rate. That is the only benchmark that means anything.