If financing has been rough in the CRE world so far, get ready because it may get worse. In a recent report, S&P Global Ratings warned that, as of September 19, 2023, when they met to discuss the piece, higher-for-longer interest rates, the potential for a recession, and lingering inflation suggested that "credit conditions for borrowers in North America will likely deteriorate."

The report, which is dated September 26, 20203, pointed to the risk of an approaching maturity wall for CRE loans and that "losses could rise amid higher financing costs, declining demand, and volatile market conditions for U.S. regional banks."

"North American corporates' net outlook bias, indicating potential ratings trends, is at negative 10.1%, the highest since July 2021," they wrote. "We expect the U.S. trailing-12-month speculative-grade corporate default rate to reach 4.5% by June next year."