Delinquency Rates and CRE

COMMERCIAL REAL ESTATE MELTDOWN? ​DESPITE THE HEADLINES, RISK METRICS REMAIN LOW​

Media Fear Of CRE Troubles Overblown​

• Despite media concerns, the U.S. CRE sector is well positioned to navigate a downcycle; CRE performance generally remains healthy​

• A CRE driven banking collapse remains improbable​

Delinquencies Are Far Below Prior Peaks​

• This is especially true for apartment and industrial assets, where the delinquency rates are well below the long-term trend​

• Retail and lodging delinquency, though more common, is not facing disproportionate risk. Occupancy and yield trends for these assets remain healthy​

• Even in the hardest hit CRE segment, office, the level of loan delinquency is far below 2010 or 2020 levels​

Boosted Outlook For CRE Assets​

• While some risk does exist, the evidence is not showing up in the property fundamentals or delinquency metrics​

• With space demand across property types generally trending positive, the outlook for 2024 is steadily gaining ground​

*Sources: Marcus & Millichap Research Services, Trepp​

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