According to recent economic data, sales of commercial mortgage bonds have fallen off a cliff, plummeting about 85% year-over-year as commercial real estate investors are bracing for what looks like a wave of defaults throughout the commercial real estate industry.
According to a recent Bloomberg News report, the collapse of the American mall industry could be right around the corner, and may cause a wave of commercial real estate defaults that extends to office spaces hit by the work-from-home scam.
Last year saw a 10% drop in commercial real estate loans — the underlying debt that typically gets repackaged into commercial mortgage bonds — compared to the year before, to $804 million from $891 million, according to Mortgage Bankers Association data. In addition, the trade group expects a further 15% drop in CRE loans in 2023 to $684 million, again slashing the number of loans that can be securitized and sold.
