Distress In Commercial Real Estate Will Continue for Some Time To Come

Jarred Schenke, writing in NationalCapital Markets,  “In total, roughly $3.3B of CMBS loans were transferred to special servicing during the month of September, $1.9B of which were office loans. Now 12.6% of all CMBS office loans are being specially serviced, up from 8.3% at this point last year. The special servicing rate increased for all five major property types. Retail and hotel loan servicing rates are now at two-year highs at 11.2% and 7.8%, respectively. More than 6% of multifamily CMBS loans are in special servicing, the highest rate in more than nine years. The multifamily special servicing rate was 2.4% six months ago.Despite the recent Fed interest rate cut of 50 basis points and a swell of commercial real estate optimism that followed, experts say commercial loans face a reckoning as a $1.5T wall of maturities nears and interest rates remain elevated above the historically low levels when maturing loans were originated.” I know you don’t want to hear this, but just hang on until 2026 when it will be much better than this…