Loan Modifications More Than Doubled Last Year
The move for lenders to find ways to avoid action on troubled CRE loans has been called “extend and pretend,” though “delay and pray” might be even more apt.
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The move for lenders to find ways to avoid action on troubled CRE loans has been called “extend and pretend,” though “delay and pray” might be even more apt.
Bank loan delinquencies are rising while loss rates are back above recent lows.
As merger and acquisition activity rises and corporate debts mature, private equity firms turn to sale-leasebacks as a flexible financing strategy.
The expected wave of CRE loan debt maturities is a problem across CRE. That includes net lease properties.
In 2023, U.S. law firms leased a collective 16.9 million square feet. That’s not only more office space leased by the sector since the Covid-19 pandemic, but exceeds the amount leased nationally by law firms in 2017, 2018 and 2019.
There’s no reason to think this might not happen again.
One sign doesn’t bode well for Fed watchers hoping for rate cuts to happen sooner than later.
The budget proposal now assumes that the rates on three-month US Treasury bills will average 5.1% this year, up from the 3.8% projected last March. The projection for the 10-year yield is now 4.4%, up from 3.6%.
Powell didn’t go into detail about the specific regulatory actions regarding commercial real estate exposure that are now being undertaken by the Fed, which is both the federal currency issuer and one of the primary bank supervising agencies, though he did say he had identified the banks most at risk.
Osborne and his team are laser focused on clients’ needs and helping them achieve their goals.
Broker/President Ronald W. Osborne represents both buyers and sellers of commercial properties of all asset classes and types, focusing primarily on privately owned properties in South Florida, ranging in value from $1 to $10 million.
Sperry – RJ Realty
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