After a period of stagnation, the commercial real estate market is showing signs of life, with February sales surging 30% year-over-year and distress rates for CMBS loans declining for the second consecutive month. This thawing was highlighted in a recent report by Moody’s and stems from a confluence of factors: an improving economic environment, lower interest rates, renewed investor confidence, and critical price discovery achieved through realized losses.
Moody’s report suggests that this shift could mark the beginning of a stabilization phase, possibly leading to growth—provided lenders and borrowers can navigate the uncertainties of the year ahead. “If lenders and borrowers can make it through the year,” the report notes, “an increase in transactions indicates a potential return to stability.”
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