Commercial real estate distress remains low. Following the failures of Silicon Valley Bank and Signature Bank, concerns surrounding high concentrations of commercial real estate portfolios held by local and regional banks has captured headlines. Outside of a few challenged segments, however, commercial assets have generally performed well. Current CRE distress levels remain low in comparison to historical periods of disruption. During the fourth quarter of 2022, nearly three years after the onset of the pandemic, distressed CRE assets comprised only 1.2 percent of nationwide sales volume. Twelve quarters after the global financial crisis began, distressed sales accounted for 20.3 percent of deal flow. The situation remains fluid, however, and will evolve as loans continue to mature in the new higher interest rate climate.
In this report:
- Overview of Current CRE Distress Sales and Loan Default Dynamics
- Breakdown of Outstanding CRE Debt by Property Type and Holding Institution
- Implications of Fixed vs. Floating Rate Borrowing Terms on CRE Loan Performance
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