COVID-19′s economic downturn will trigger rising defaults and losses in the commercial real estate lending sector during a speedy recovery or second-wave, according to a new report released by Trepp.

The cumulative default rate across commercial mortgages will increase to 6.5%, up from the current 0.5% default rate, Trepp wrote in the report, which analysed 13,000 commercial mortgages from various banks.

While a dreary what-if analysis, Trepp noted its latest forecast isn't as severe as its March's estimates that predicted significantly higher cumulative default rates in the commercial sector.

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Victoria Hudgins

I am a reporter for Legaltech News where I cover data privacy, cybersecurity and technology's impact on the business and practice of law.