Will Commercial Real Estate Distress Surge

Distress In The Headlines… But What does the Data Say​

Wave Of Distressed Assets Hitting The Market Still Unlikely​

• Despite recent reporting, CMBS delinquency for most property types is well below levels that show widespread distress​

• Many of the assets in CredIQ’s tracker are well performing properties that will reach deals to extend loan terms​

Extend and Pretend Still Playing Out, But Shift Is Occurring​

• Many of the properties currently in negotiation are unlikely to reach market, lenders are shifting strategies​

• Some are using this period to clear off riskier loans, primarily on office assets, but also for low performing properties​

Delinquency Is Low As Rate Cuts in 2024 Seem Certain​

• While rising, overall delinquency rates for non-office properties are well below Financial Crisis or COVID-19 levels​

• As the Fed diminishing rates, lenders are expected to ease standard, further decreasing the likelihood of widespread distress emerging​

*Through June
Sources: Marcus & Millichap Research Services, CredIQ, Trepp​

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