Posted on 02/17/2024 12:57:35 PM PST by george76
Twenty percent ($929 billion) of the $4.7 trillion of outstanding commercial mortgages held by lenders and investors will mature in 2024, a 28 percent increase from the $729 billion that matured in 2023
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“The lack of transactions and other activity last year, coupled with built-in extension options and lender and servicer flexibility, has meant that many loans that were set to mature in 2023 have been extended or otherwise modified and will now mature in 2024, 2026, 2028 or in other coming years,” said Jamie Woodwell, Head of Commercial Real Estate Research at MBA. “These extensions and modifications have pushed the amount of CRE mortgages maturing this year from $659 billion to $929 billion.”
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The loan maturities vary significantly by investor and property type groups. Just $28 billion (3 percent) of the outstanding balance of multifamily and health care mortgages held or guaranteed by Fannie Mae, Freddie Mac, FHA and Ginnie Mae will mature in 2024.
Life insurance companies will see $59 billion (8 percent) of their outstanding mortgage balances mature in 2024. By contrast, $441 billion (25 percent) of the outstanding balance of mortgages held by depositories, $234 billion (31 percent) in CMBS, CLOs or other ABS and $168 billion (36 percent) of the mortgages held by credit companies, in warehouse or by other lenders will mature in 2024.
By property type, 12 percent of mortgages backed by multifamily properties will mature in 2024, as will 17 percent of those backed by retail and 18 percent for healthcare properties. Among loans backed by office properties, 25 percent will come due in 2024, as will 27 percent of industrial loans and 38 percent of hotel/motel loans.
He’s been very frank with me about the daunting challenge they were facing. Even though the average office building in their portfolio is more than 90% occupied, he knew the appraisals on the properties would be so putrid that they’d never be able to renew the mortgages when they came due this year.
“Everything’s ending. Time to wake up.”
Blackstone sold the Griffin Towers office complex in Santa Ana for $82 million, or about 36% less than the firm paid in 2014 ... Principal Financial Group sold a Parsippany, N.J., office building for $14.3 million, down from the $52 million it paid in 2008 ....
The tower at 350 California in San Francisco, valued at $300 million in 2019, is expected to trade at about $60 million, or roughly 80% below that previous valuation....
the office sales market has been moribund.
https://freerepublic.com/focus/f-news/4153752/posts
Blackstone defaulted on the $308 million mortgage on a Manhattan office tower more than a year ago — and the debt is now up for sale at a discount of more than 50%. .
As of September 2023, the occupancy at 1740 Broadway was a mere 7.4% ... The tower is just one of many empty office buildings scattered across New York City
https://freerepublic.com/focus/f-news/4211053/posts
MEANWHILE——ENGORON & JAMES WANT TO SHUT DOWN TRUMP...
WAIT UNTIL THEY SEE the VALUES TUMBLE IN NYC & ELSEWHERE
Does anything good come out of it?
One of my clients sold all his company’s office properties in the last 18 months. The last sale closed in January after it was sold for far less than the original asking price.
He’s been very frank with me about the daunting challenge they were facing. Even though the average office building in their portfolio is more than 90% occupied, he knew the appraisals on the properties would be so putrid that they’d never be able to renew the mortgages when they came due this year.
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Your client was smart to get out now, while the buyer to seller ratio is still decent.
As we get farther into the decade, I expect more sellers than buyers to be the norm.
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