A new analysis from The Business Journals shows commercial properties facing distress since the pandemic have lost $10B in property values.
The analysis looked at 599 loans on U.S. properties facing some degree of distress, defined as properties flagged by loan servers as in some stage of foreclosure or at least 30 days delinquent on payments.
Valuation losses since issuance exceeded $100M for 24 loans, nine of which are owned by lenders following unsuccessful foreclosure auctions.
Retail properties make up 194 of the 599 loans, and 177 are hotels. Office properties have lost nearly $1.9B.
Commercial Mortgage-Backed Securities properties in the survey have lost $4.7B, and loans backed by hotels have lost approximately $2.5B.
Office properties may pose a significant risk moving forward. According to Moody’s Analytics, there were $4B in mortgage bonds backed by office buildings that came due in 2021 and $7B in 2022. For 2023, the number has increased to $17B. (Source)