Even as the countdown to the Federal Reserve announcing the size of the first interest rate cut continues into the early afternoon, there's a second one. Longer and in the world of commercial real estate, with greater immediate impact — and that is, what is happening with troubled loan workout strategies.

Longer because this will continue for some time. Greater impact because the results might help decide which properties — which companies and investors — might have a chance of financial survival for enough time to eventually take advantage of whatever lower interest rates will be available for refinancing.

CRED iQ has again examined trends in workouts and resolutions for CRE securitized loans — CMBS, SBLL, CRE CLO, and Freddie loans — between January (with $64.3 billion across 5,488 loans) and August ($156.2 billion across 6,351 loans) in 2024. The top four workout strategies were successful resolution, foreclosure, loan modification, and real estate ownership (REO, meaning returned to the lender).