NYC’s the Hub for Looming Maturities in Office CMBS
A total of $40.47 billion of CMBS loans backed by office properties will reach maturity between now and the end of 2024, according to a Trepp/CompStak report. Given that it’s the nation’s largest office market, it’s not surprising that New York City is the epicenter of these looming maturities.
Trepp data show that more than one-third of the maturities—$15.7 billion—are backed by properties in the New York metro area, including $12.7 billion in Manhattan alone.
The New York area is also the hub for a subset of these CMBS deals: fixed-rate loans, which Trepp sees as especially challenged because they’re maturing during what could be the peak of the Federal Reserve’s current tightening cycle. “As a result, the loan interest rate will be considerably higher,” according to the report.
New York also leads in another worrisome metric: lease rollover in Class A buildings built between 1960 and 1980. CompStak reported that 27.7% of New York leases rolling over in the next two years are in Class A properties of this vintage, which as a rule have experienced net effective rents below 2019 levels for three consecutive years. That percentage is above the 20% average for the top 11 metros covered in the report.