WILL A WAVE OF DISTRESS HIT CRE MARKETS THIS YEAR?
Investor Sentiment Is Adapting
- Some institutional investors believe CRE values will fall further, but many private investors see opportunity
- Property performance is generally strong, meaning a wave of distress and significantly discounted sales remains unlikely
CMBS Delinquency Rates Are Below Historic Norms
- Apart from office, property type specific delinquency rates are either near modern lows or trending lower
- Apartment and industrial stress are both below 2%, while retail property delinquencies have trended lower in 2024
Less Competition From Institutions Could Aid Private Buyers
- Institutional investors largely remain on the sidelines, reducing property acquisition competition – a window of opportunity for private investors
- Long-term CRE drivers remain sound, and investors should consider where the economy will be in 5 to 10 years
*Through May
For loans 30+ days delinquent
Sources: Marcus & Millichap Research Services, Trepp
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