“As 2020 nears its end, the pandemic is disrupting the origination and payment of commercial property loans even as borrowing rates boost interest in financing. The level of commercial and multifamily loans outstanding mounted all year as investors and owners sought to take advantage of historically low interest rates. At the same time, borrowers’ ability to repay outstanding loans shows further signs of stress.” (CoStar – Subscription Required, 12/23)
What you need to know:
- The amount of mortgage debt backed by CRE increased for the 33rd straight quarter. Despite a significant decrease in acquisition funding, loan refinancings, particularly from government-sponsored entities, like Fannie Mae and Freddie Mac, helped raise total outstanding mortgage debt.
- The balance of delinquent commercial mortgages increased for the first time in three months in November, where delinquencies had been decreasing considerably from the double-digit-percentage levels throughout the summer. The combination of historically low interest rates and rising delinquencies coming into the new year combine for a mixed 2021 outlook.