The current CRE market seems to be a whiplash land as owners, operators, and investors get pulled to look at the state of the economy, then resulting interest rates and the implications for refis, over to rising expenses of operations, then back to the economy, starting another round.

But it's all important, and Green Street's Danny Ismail and Harsh Hemnani looked at a lot of CMBS data to "study a sizable group of loans with large maturities in the next few years with an emphasis on office, retail, lodging, multifamily and industrial properties." Current credit conditions are difficult, with 10-year Treasury interest rates up 230 basis points since January 2022 and a conventional, 10-year secured commercial mortgage all-in rate up 300 basis points to about 6% over the last 18 months. The last time such levels were seen was during the global financial crisis.

Average U.S. commercial properties are down in value by 15% already and "Green Street's analysis of the unlevered expected returns on real estate versus corporate bond yields suggests that real estate values could decline by another [approximately] 10 percentage points to be priced 'fairly' relative to bond yields based on historical relationships."