January CRE Foreclosures

Written By Marc Nicholson

NEW DISTRESSED ASSET DATA AND WHAT IT MEANS FOR INVESTORS​

CRE Foreclosures Are Inline with Pre-Pandemic Norms​

  • CRE foreclosures in the month of January rose nearly 100% from 2023, likely impacting urban office assets strongly​

  • However; the current level of 635 is just slightly ahead of the 2014-2019 average for CRE foreclosures in each month​

Debt Set To Mature in 2023 Differed into This Year​

  • New FDIC guidance empowered banks to offer Commercial Real Estate borrowers’ extensions last year​

  • As a result, between 1/3rd and 2/3rds of the CRE debt that was set to expire last year will now mature in 2024, 2025, and 2026​

Expect Trickle of Distress Rather Than A Tsunami​

  • With CRE fundamentals and bank balance sheets strong, its unlikely we will see major distress in the market this year​

  • Well preforming asset types like industrial, apartment, and retail are unlikely to be foreclosed on or traded at discounts​

*Through January​
Sources: Marcus & Millichap Research Services, ATTOM​

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Marc Nicholson
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