Commercial real estate professionals understandably spend considerable time looking at CRE financial trends, regulations, and potential risks. But sometimes important information comes in more general forms, like inflation and resulting Federal Reserve interest rate hikes. The general eventually becomes the specific.
A new S&P Global Ratings report on credit trends is one of those times when something of larger scope has implications for the CRE industry. The firm sees a rather startling increase in selective defaults — from 25% in 2008 to more than 66% in 2022, though so far, year to date, in 2023 down to just under 50% — in which a company defaults on specific obligations but not others.
"The percent of selective defaults in North America was just 21% in 2008 compared with 65% of defaults in 2022," S&P wrote.
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