In what may be a contrarian indicators of a bottoming market according to the WSJ, the 2nd quarter of 2024 saw commercial foreclosures hit $20.5 billion, the highest level since 2015.
One difference now in the distressed market compared to before is that due to the shift away from in-office work, owners of office buildings are giving back their keys or doing short sales rather than trying to hold on and ride out a return to prior office demands that appears likely to never return.
The most foreclosures are seen in the office market while the apartment market is seeing some signs of trouble, generally from investors who bought properties right before or at the start of 2020 with short-term fixed interest rates and now are seeing their monthly payments double after their loans are resetting. Also some market have seen rent declines such as Austin, leading to borrowers not being able to cover their debt payments.
One example of a steep discounted office building is an office building in Washington D.C. which State Farm Life Insurance which was the lender, offloaded for $17.6 million, over 70% lower than its selling price 14 years ago.
Recent Comments