Conditions are getting tighter in commercial real estate. The Mortgage Bankers Association (MBA) has said that outstanding commercial mortgage debt grew in the first quarter of 2024 despite slow originations. Fewer loans are getting paid off or refinanced, so more debt sits on the books.
That speaks to what likely includes more distress, which could be why some big names in CRE are eyeing markets for opportunistic buying. Goldman Sachs analyst Caitlin Burrows thinks office markets have bottomed. Global Co-Head of Blackstone Real Estate Nadeem Meghji recently said liquidity is returning to markets, at least for good opportunities and those who have the capital to exploit them.
And all that depends on distressed properties to restart heavier transaction loads. CRED iQ recently looked at the decline in valuations for distressed properties. They have been steep and will offer bargains for well-heeled buyers, losses for "motivated" sellers.
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