Nearly 23% of the commercial real estate loans in CRED iQ’s database that are secured by properties within the Minneapolis MSA are delinquent or in special servicing. That positions the market as the worst performing among the nearly 400 MSAs the company tracks nationwide, which encompasses more then $900 billion in outstanding commercial real estate debt.
A record $151.8 billion in U.S. mortgages backed by rental apartment buildings are set to expire this year, and $940.1 billion are set to expire over the next five years.
Investors purchased $14 billion of apartment buildings in the first quarter of 2023. That represents a 74% decline in sales from the same quarter a year earlier and is the largest annual sales decline for any quarter going back to a 77% drop in the first quarter of 2009.
Extra Space Storage Inc. has struck a $12.7 billion deal to combine with smaller rival Life Storage Inc., which earlier rejected a bid from industry behemoth Public Storage. the deal would create the largest storage-facility operator in the country by number of locations. Including debt, the combined company would have an enterprise value of roughly $47 billion.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures home prices across the nation, fell 0.2% in January compared with December on a seasonally adjusted basis. Prices have fallen for seven straight months, the longest streak of declines since 2012.
Within the next three years, loans are maturing on more than 9,500 office buildings and 17% of all U.S. office stock.
This year will be critical because about $270 billion in commercial mortgages held by banks are set to expire—the highest figure on record. Most of these loans are held by banks with less than $250 billion in assets.
The delinquency rate for commercial mortgage-backed securities increased 0.18 percentage point in February to 3.12%, the second-largest increase since June 2020.
Word that landlords were withdrawing cash spread rapidly in the close-knit community of New York’s real-estate families, prompting others to follow suit. Regulators closed Signature Bank on Sunday in one of the biggest bank failures in U.S. history. Signature built its business in part through lending to New York developers and owners of multifamily buildings, office towers, retail property and other commercial real estate.