The pool average hides a two-speed market: conduit loans carry roughly twice the distress of large loans. Loan-level resolutions show recovery values far below pool-level headlines.
Conduit distress at 12.3% against about 6% for large loans is a ratio of roughly two to one (derived). KBRA does not attribute the gap in the data summarized here.
The St. Louis liquidation implies a loss of about 91% of the loan balance (derived). A Denver office building taken by foreclosure in February is under contract at $2.7M, about $27 per sf on 98,577 sf (derived).
An 88-key St. Louis hotel sold for $2.3M, about $26,000 per key and roughly 38% of a $6.1M-plus appraisal (derived).
Implications
Pool-level distress rates describe the cycle; resolution values set your exit. Lenders and special servicers should underwrite recovery on property type and location, not on the pool average. Buyers of distressed assets should price off resolved loan-level comps, not appraisals.
Flags: Different methodologies (KBRA vs. Trepp) produce different headline rates. Loss severity, per-sf and per-key figures are CRE360 derivations. The three resolutions are individual special-servicing outcomes, not market comps, and condition and deferred maintenance are not disclosed.
Related coverage
Key Takeaways
- Conduit distress runs at roughly twice the rate of large-loan distress
- Loan-level liquidations recover far less than pool-level headlines imply
- Price distressed assets off resolved comps, not appraisals
KBRA, CMBS Loan Performance Trends: September 2026, Sept. 30, 2026 · Connect CRE, Return to Lender: Week of Oct. 1, 2026
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