Distressed office loans will likely "pile up" into 2023, according to experts from Trepp, who predict there will be billions in unresolved office loans by year-end.
"Maturity dates will come and go; loans will reside in CMBS purgatory for months; negotiations will take considerable time; and ultimately many loans will be extended," says Manus Clancy, Senior Managing Director at Trepp. "Borrowers will be happy to lock in lower rates for longer and special servicers will rejoice."
Lonnie Hendry, SVP, Head of CRE & Advisory Services at Trepp, foresees a "measurable number of liquidations at steep discounts," adding that so-called "bad" office properties will trade at significant discounts while "borderline" properties in strong markets remain in CMBS purgatory.
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