CMBS Delinquency Climbs, Appraisers Impacted – What Can You Do?
In this issue:
- CMBS Delinquency Impact: Valuation pressure, special servicing, and more
- New URAR Companion Courses: Two new courses launching at ValExpo
- AI on AI: Explore and integrate GenAI into your practice
Insights
CMBS Delinquencies Continue to Climb – Implications for Appraisers
The U.S. commercial mortgage backed securities (CMBS) delinquency rate rose again in July, marking its fifth consecutive monthly increase, reaching 7.23%, up 10 basis points from June. Here’s what you need to know from the July 2025 Trepp CMBS Research report:
- Office Sector Still in Trouble
Despite a slight decline, office delinquencies remain elevated at 11.04%, just shy of June’s record. More than $800 million in new office delinquencies were recorded, outpacing cures by over $150 million. - Multifamily Drives the Uptick
The multifamily delinquency rate climbed 24 basis points to 6.15%, making it the only major property type with an increase this month. This sector deserves close monitoring, especially for appraisers working in urban or overbuilt markets. - Retail and Lodging See Modest Improvement
Retail delinquencies dipped to 6.90%, while lodging fell to 6.59%, offering some signs of stabilization. - Mixed-Use, Office, and Retail Lead in New Distress
Each of these property types logged over $800 million in newly delinquent loans, with July seeing 129 new delinquencies totaling $4.4 billion—well above the $3 billion in loan cures.
Why It Matters for Appraisers
- Valuation Pressure Ahead: Continued distress in office and growing challenges in multifamily suggest more downward pressure on values, especially in secondary markets or where lease-up risk is high.
- Increased Scrutiny on Assumptions: Appraisers should ensure their income assumptions, vacancy projections, and cap rates are well-supported—particularly in office and multifamily valuations.
- Opportunities in Special Servicing: As delinquency rates rise, demand for appraisal work related to loan workouts, restructures, and REO valuations is likely to grow.
New URAR Companion Courses Launch at Valuation Expo
The Appraisal Institute is proud to announce the official release of its two new companion courses on the Uniform Residential Appraisal Report (URAR) at Valuation Expo in Las Vegas:
- Reporting Market Analysis and Better Understanding the New URAR
- Supporting Adjustments and Reporting the Sales Comparison Approach in the New URAR
These courses build on the foundational Appraiser’s Guide to the New URAR and are designed to help appraisers strengthen their practical skills and reporting accuracy ahead of the 2026 implementation deadline.
The launch at Valuation Expo marks the beginning of broader availability. Appraisal Institute chapters can now schedule these courses in advance to bring timely, hands-on training directly to local markets.
Stay tuned for upcoming offerings—or contact your local chapter to request a session in your area.
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“AI on AI” Seminar Series
August 21, 2025, 12 PM ET
Join us for an exclusive preview of the Appraisal Institute’s newest professional development offering: AI on AI, a groundbreaking seminar series designed to help real estate appraisers explore and integrate Generative Artificial Intelligence (GenAI) into their practice.
In this session, you’ll learn:
- How AI on AI builds on the success of Mark Linne’s previous programs
- What GenAI tools can do for real estate appraisers—today and in the near future
- What to expect from the six-month series, including format, topics, and community interaction
- How appraisers are already using GenAI for document review, data mining, prompt engineering, and more.
Featuring:
- Mark Linne, MAI, SRA, AI-GRS, Chrysalis Valuation Consultants LLC
- Maureen Mahoney, Director of Education, Appraisal Institute
Advocacy Updates
Help Shape Our Advocacy: Use the Government Relations Tip Line
Have you heard something in your community or professional circles that could impact the appraisal profession? Noticed a policy trend worth watching? We want to hear from you.
The Appraisal Institute’s Government Relations team relies on the insight of members across the country to stay ahead of key issues. Whether it’s a local proposal, a state initiative, or a national trend, your insight helps us act quickly and effectively.
Your tip could help identify early threats or opportunities and strengthen our advocacy at every level.
Send your insight or intel to: governmentrelations@appraisalinstitute.org.
Together, we can make sure appraisers’ voices are heard.
GSEs Launch Uniform Property Data Report to Streamline Mortgage Underwriting
On July 30, 2025, Fannie Mae and Freddie Mac introduced the Uniform Property Data Report (UPDR), a standardized reporting template for use by property data collectors when a property data collection is performed in connection with a GSE-granted appraisal waiver. Developed under the direction of the Federal Housing Finance Agency (FHFA), the UPDR responds directly to industry feedback calling for greater uniformity in property data output formats.
By creating a single, dynamic report design, the UPDR simplifies property data review, supports automated data validation, and eases training across the industry. Its layout mirrors the forthcoming Uniform Residential Appraisal Report (URAR) under UAD 3.6, aligning with broader efforts to modernize housing finance technology. Occasionally, an appraiser may also be provided with a property data collection report for use in completing a hybrid appraisal assignment.
However, the Appraisal Institute has consistently opposed the concept of appraisal waivers and the use of property data collections as alternatives to appraisals. The Institute has expressed concerns about the risks these programs pose to consumers, the reliability of collateral valuation, and the erosion of the appraisal profession. It has actively pushed back on the GSEs’ broader “appraisal modernization” efforts, urging greater emphasis on the independent, market-based analysis that only qualified appraisers can provide.
Key Details:
- Voluntary Implementation Period: Through June 30, 2026, lenders are encouraged to work with vendors to adopt the UPDR.
- Mandatory Use Date: The UPDR will be required for loans with application dates on or after June 30, 2026.
- Support Resources: The GSEs have released a Style Guide, Layout Examples, Data Specifications, and Sample Completed Reports to assist vendors in implementing the new format.
For resources and implementation details, visit:
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Team Appraisal Institute
