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Distress Tsunami Has Been Delayed, But Not Averted
Although the expected tsunami of distressed assets hasn’t materialized, distress among certain owner types and asset classes can’t be downplayed, LightBox says in a new report. The company predicts that “shadow distress”—assets, businesses and investors that have been propped up by relief efforts and/or relaxed regulations—will intensify the pain in 2022.
“Certain statistics and data points conjure the belief that the worst is over and the CRE market is back on solid footing,” said Tina Lichens, SVP, broker operations, LightBox. “But experts we talk to contend that the inevitable has only been delayed; we’ve kicked the can down the road.”
LightBox’s analysis of special servicer activity points to increasing potential distress moving forward, with nearly half to occur into 2023 and later. Currently, the marketing of loans/notes is heating up, especially for banks trying to clean up balance sheets but less for special services whose protocols are more rigid.
- ◦Sale/Acquisition
- ◦Financing
