Fitch Ratings: Overall defaults steady as office and term defaults rise; resolution conditions improve

Fitch Ratings reported that overall defaults in the U.S. credit markets have remained steady in early 2026, despite rise in office CRE defaults. The firm noted that while office CRE values have yet to reach a trough, defaults have not accelerated sharply, with resolution conditions showing signs of improvement. This trend is attributed to a combination of proactive lender interventions and a gradual stabilization in asset values.

In the private credit space, defaults hit new highs in 2025, though losses have remained relatively limited due to strong collateral coverage and conservative underwriting practices. Fitch emphasized that while the office sector continues to face challenges, the broader credit environment remains resilient, supported by disciplined lending and improved resolution mechanisms. Investors are advised to monitor sector-specific risks, particularly in CRE with government lease exposure, where default and loss risks remain elevated.