Retail and Hotels are crashing!

Commercial Real Estate is still crashing, specifically Lodging and Retail. The delinquency rate for commercial mortgage-backed security (CMBS) is 9.60%! This is not a surprise since tourism and retail industries were the hardest hit int he current economic recession.

The previous recession lasted from December 2007 to June 2009. 10.34% Peak CMBS Delinquency Rate in July 2012, 3 years after the last recession ended.

The previous commercial real estate crash, based on Green Street Commercial Property Price Index, started in August 2007, but bottom out in May 2009. Then recovered by April 2013. The present commercial real estate crash began in February 2020.

๐‚๐Œ๐๐’ ๐ƒ๐ž๐ฅ๐ข๐ง๐ช๐ฎ๐ž๐ง๐œ๐ฒ ๐‘๐š๐ญ๐ž ๐‰๐ฎ๐ฅ๐ฒ ๐Ÿ๐ŸŽ๐Ÿ๐ŸŽ
23.79% Lodging
16.10% Retail
3.33% Multifamily
2.40% Office
1.24% Industrial
9.60% Overall
2.62% Overall from last year

โŒ Lodging and Retail took a beating.

โœ”๏ธ Industrial, Multifamily, and Office are holding up well.

โ‡ง CMBS Delinquency Rate is expected to increase.

โ—I have seen commercial properties sold at unbelievable prices until 2013.

โ—Commercial Real Estate is already crashing and will continue.

โ—Commercial Real Estate is crashing much quicker than residential real estate but may rebound much quicker.

CMBS DELINQUENCY RATE Report, with the last update on August 04, 2020.

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Commercial Property Price Index by Green Street Advisors


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