Delinquencies for both commercial real estate and multi-family dwellings
are rising to unprecedented levels.
This is beginning to sound a bit like what happened after Lehman collapsed in 2008.
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.
The delinquency rate of office mortgages that have been securitized into commercial mortgage-backed securities (CMBS) spiked to 11.7% in August, the worst ever, a full percentage point above even the peak meltdown rate of the Financial Crisis (10.7%), according to data by Trepp , which tracks and analyzes CMBS.
Back in December 2022, the office CMBS delinquency rate was still 1.6%. Since then, it has exploded by over 10 percentage points.
It's been 17 years since the start of the great recession, and we are back to the same sh%$ different day stuff.
It took over 50 years for the lessons of the Great depression to be unlearned.
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