Office demand is not returning. Owners working with lenders on short sales aren’t counted as foreclosures muffling the numbers. The volume of commercial property sales involving lender participation soared 83 percent in the first half of 2024 from the two previous quarters, according to Ten-X, one of the biggest auctioneers of commercial property online.
The big chill: Foreclosures on the rise Value of seized commercial properties held by lenders
July 2024 8.11%
13 percent q/q increase ($20.5B) in foreclosed and seized CRE, including apartments
extend and pretend 40 percent of bank CRE loans maturing this year are 2023 holdovers
40 percent est. 2024 maturing CRE loans that are also 2023 holdovers
8 percent average bank reserves held on CRE portfolios, five times the normal reserves
$2.2 trillion will come due 2024-2027 as debt maturities are expected to continue to rise
Send in the clowns
Downtown development districts and other nonprofit groups are hiring buskers, jugglers, mimes and musicians, betting their acts can make empty office districts feel safer and less depressing.
Delinquency rate of office CMBS loans percent
Dec 2012 10.42%
Mar 2017 7.97%
July 2024 8.11%
Source: Data source MSCI; CBRE Group; Autonomous Research; Trepp; Surge in commercial-property foreclosures suggests bottom is near, Peter Grant, wsj.com; Erik Sherman, globest.com, Cities’ new fix for dying downtowns? Bring in jugglers, Konrad Putzier, wsj.com
