Commercial Real Estate Loans in Crisis: 14% Negative Equity… Office Building Loans Hit 44%… CRE Faces Bear Market as Rates Rise and Refinancing Looms

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The commercial real estate (CRE) landscape is facing a challenging scenario, with 14% of all CRE loans and a staggering 44% of office building loans slipping into “negative equity.” This indicates that the debt on these properties now surpasses their market value. The current downturn, with office building prices plummeting by 40%, has pushed CRE into bear market territory, down over 20% overall. As interest rates rise and looming refinancing deadlines approach, the situation poses a significant threat, especially with over $2.9 trillion of CRE debt in the hands of US banks, mostly held by regional institutions.

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