đ¨ CMBS Defaults Surge: Midtown Collapses
Delinquency spikes bring Midtownâs office market to its knees.
CMBS delinquency rates jumped to 6.33% in September, with the office sector hitting a whopping 10.83%âits worst since 2010.
Meanwhile, over in Midtown Manhattan, a Credit Suisse office building was basically on clearance for $270 per square foot, and nobody bit.
This 24-story dinosaur, originally backed by a $158 million loan in 2019, just got handed back to the lender for a rock-bottom $23 million.
And itâs not just in Manhattan; the problem is everywhere.
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And speaking of office space no one wants, cities like San Francisco, Houston, and Chicago are setting records for empty office buildings, with San Francisco leading the pack at a lovely 30% availability rate.
And while commercial real estate grapples with its issues, residential properties arenât faring much better in some places.
Mississippi tops the list of states with the most underwater mortgages, followed by Louisiana and Arkansas,
In this edition of the AltReports:
đ Debt Distress
đť Midtown Meltdown
đ˘ Commercial Crisis
đ¨ Office Overload
đ Mortgage Misery
Video of the Week: Sellers Capitulating. $50,000 Losses is the New Normal
Chart of the Week: UBS Global Real Estate Bubble Index
Podcast of the Week: Navigating Distressed Deals, Massive Price Cuts, and High Returns
CRE Mess Not Letting Up: CMBS Delinquency Rates Jump in September
In the never-ending circus of commercial real estate, CMBS delinquency rates jumped to 6.33% in Septemberâbecause why not?
The office sector's pulling out all the stops with a 10.83% delinquency rate, its highest act since 2010.
Property owners are caught in a blender of plunging values and sky-high vacancy rates, unable to refinance or sell.
Spoiler alert: even more loans are set to flop in the coming months.
No One Wanted a Midtown Office for $270 psf
Apparently, the real estate gods have forsaken Midtown, because nobody wanted the Credit Suisse office building at 55 East 52nd Street for a paltry $270 per square foot.
After sitting pretty with a $158 million loan from 2019, this relic of a building has been handed back to the lender for a low-budget $23 million.
Itâs a 24-story, 388,000 square foot monument to the good old days when office workers actually came into work.
Epic Office Glut Hits Records Across the Country
In cities like San Francisco, Atlanta, Chicago, and more, office availability rates are setting records.
San Francisco leads the pack with a 30% availability rate, followed by Houston at 29%, because why should they be left out?
Weâre basically back to post-dot-com bust levels of chaos.
Houston Office Leasing Hits 8-Year Low As Market Sheds 1M SF Of Inventory In Q3
Houstonâs office leasing market just hit its lowest point in eight years, shedding a cool 1 million square feet of inventory in Q3 2023.
Translation? No one wants to sign new leases, and lease renewals are the only thing keeping landlords from total despair.
As companies continue rethinking how much office space they actually need (not much), the city's rental rates and property values are taking a beating.
Top 10 States with Underwater Mortgages
Mississippiâs the reigning champion of underwater mortgages with 16.7% of properties worth less than the mortgage owed.
Closely followed by Louisiana at 14.5% and Arkansas at 13.9%.
Illinois and Iowa round out the top five, because misery loves company. These unlucky homeowners owe at least 25% more than their homes are actually worthâouch.