Commercial mortgages

The amount of distressed assets rose 10% in the first three months of the year, according to a new report from MSCI Real Assets.

But when compared past periods of upheaval, those rates remain relatively low, the Mortgage Bankers Association report showed.

However, much of the damage could already be priced into the stocks after this latest selloff, analysts said.

The company's recent expansion into commercial servicing is part of a broader effort to build a diversified business model, according to President and CEO Mike Dubeck.

Excluding farms and residential properties, banks accounted for more than 60% of the $3.6 trillion in commercial real estate loans outstanding in the fourth quarter of 2022, with smaller institutions particularly exposed, according to the Federal Reserve's semi-annual Financial Stability Report published last week.

The five-year notes benefit from overcollateralization equal to 35%, and will use the proceeds to repay a line of credit facility.

Only about $4.27 billion of the bonds have been issued so far this year, down from $29.38 billion at this same point last year, according to data compiled by Bloomberg based on deals without government backing.

Nonbanks will probably see the least change, while securitization lenders, depositories and REITs are likely to experience the most, an Urban Land Institute survey suggests.

Banks including Wells Fargo, Bank of America and JPMorgan Chase have pulled back on financing for offices and other commercial real estate following a record burst of lending in the first half of this year. 

The Mortgage Bankers Association forecast comes as bankers continue keeping an eye on their commercial real estate portfolios, including office buildings. The MBA also noted that many companies have long-term leases on their offices, likely making the hit more gradual.

About 30% of U.S. office buildings are at high risk of becoming obsolete as tenants’ tastes change in the hybrid-work era.

The loan pool’s volatility score is high but its diversity of properties is a plus.

Late payments on office loans have trended upward recently, but longer lease periods may mitigate the potential for distress in that sector, the Mortgage Bankers Association said.

The acquirer will use the liquidation of a residential mortgage company’s assets to move several notches up in the rankings.

It will be several years before business and group travel return to normal levels, according to an estimate from the American Hotel & Lodging Association.

The city's office vacancy rate rose to 20.1% in the second quarter despite an increase in leasing activity.

Also, Freddie Mac elects a former NY Fed leader to its board, Cenlar hires a servicing veteran and NewDay USA gains a tech officer.

Fears of a permanent exodus from office life may have been premature, according to a study that finds a majority of businesses plan changes, but no significant downsizing of space.

Experts expect only a small uptick in distressed mortgages, either through default or inability to refinance, which will create some opportunity for debt buyers

A $28.8 billion rise in multifamily debt made up 65% of the $44.6 billion quarter-to-quarter gain, the Mortgage Bankers Association reported.