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Trepp Survey Predicts Rise in CRE Distress by End of 2022
Trepp’s newly released 2022 CRE Sentiment Survey found most respondents indicating that headwinds are outpacing tailwinds. More than half said that economic conditions and higher interest rates would impact their businesses negatively.
Eighty-three percent of survey participants predict that within the next six months, CRE/CMBS delinquencies will worsen—a reversal of the overall trend of declining CMBS delinquencies over the past 25 months. A smaller majority (52.8%) said the same about commercial real estate fundamentals, with investment sales activity expected to fare worse than leasing.
Seventy percent of respondents expect that the office sector will see the biggest increase in distress for the remainder of 2022. The sector scored that dubious distinction by a wide margin: just 12.9% of respondents predicted that second-ranked retail would see the most distress. Office also led in more granular questions about declines in economic occupancy and net effective rents.
- ◦Lease
- ◦Sale/Acquisition
- ◦Economy
