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Valuation Declines on Distressed Properties Now Average 43%
Valuations on distressed properties as of midyear 2024 have declined an average of 43% from their original issuance, CRED iQ reported. The decline has increased by 140 points from six months ago.
By valuation grouping, distressed properties valued at less than $5 million have seen the largest declines in assessed values at an average of 51%. Those valued at $100 million or more have seen assessments drop by 37%.
The top three largest overall declines for 2023 and 2024 were in the office sector, which also saw the largest single-property valuation decline. That distinction falls to 1740 Broadway, an office property in Midtown Manhattan, which is now valued at $175 million, a drop of $430 million. Overall, valuations on distressed office properties are down by 53%.
Not far behind is retail, which registered an average valuation decline of 52%. In this sector, sizable assessment declines include a $360-million drop for the Mall of America in Bloomington, MN and a $244.6-million decline for Mall de las Aguilas in Eagle Ridge, TX, which is now valued at just $10 million.
The hotel sector saw an average valuation decline of 40% on distressed properties. Multifamily was largely flat compared to six months ago with a 35% decline, while assessment declines for distressed industrial improved from an average of 32% to 10% over the same time period.
Pictured: 1740 Broadway. Credit: Kevin Chu and Jessica Paul Photography.
- ◦Financing
