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Webinar: Distress Cycle Evolves as $520B of Maturities Looms
With roughly $52 billion of maturing commercial real estate debt considered at-risk out of the $520 billion coming due in 2026, industry leaders on the front lines of CRE distress are seeing the market evolving as the year progresses. For one thing, distress is moving beyond the office sector.
“We’re actually seeing less office now,” Andrew Hundertmark, Vice Chairman, Argentic Services Company, told moderator Steve Pumper during the Connect CRE Distressed Assets Update webinar. “I think more multifamily and hospitality is coming in. We had our share of office, primarily suburban B and C stuff.”
That doesn’t mean office distress is going away. Randall Rosen, director of real estate management, LNR Partners, said that in the major metro areas, office is “just really struggling. I would probably put Chicago at the top of the list.”
Not only the property types incurring distress but also the markets are evolving. Compared to prior distress cycles, “we started to see distress come back in markets that we hadn’t seen it in, starting last year,” said Pumper, Executive Managing Partner, Transwestern. That means an uptick in deals in cities such as Phoenix and Dallas/Fort Worth. He added that there has been some distress cropping up in South Florida, “which has been relatively healthy throughout the process.”
In the first of two parts, Pumper, Rosen and Hundertmark delve into owners’ changing responses to property-level distress, how the current cycle differs from what the industry saw in the early 1990s and the Global Financial Crisis, and the viability of office-to-residential conversions. Click here for on-demand replays.
- ◦Sale/Acquisition
- ◦Financing
