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Office CMBS Delinquency Rate Spikes to Record 11.7%
Extend-and-pretend and forbearance deals widely implemented to “cure” delinquent CRE mortgages. By Wolf Richter for WOLF STREET.
The office and multifamily sectors of commercial real estate loans got further bludgeoned in August, despite large-scale extend-and-pretend and forbearance deals executed in the hopes for better times and lower interest rates and more demand so that lenders don’t end up with the property and a huge loss. Banks and thrifts are on the hook for 29% of multifamily debt, life insurers for 12%, and private label CMBS – discussed above – CDOs, and other Asset Backed Securities for about 3%. The Treasury market counts on the tariffs to slow the supply of new debt and could throw a hissy-fit if they end while the Fed cuts rates into accelerating inflation.
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