Will Empty Offices Cause the Next Banking Crisis? Commercial Real Estate ‘Debt Bomb’ of $929 Billion Comes Due this Year with HUNDREDS of Banks Facing Insolvency Runs If Default Rates on the Loans Spike

February 20, 2024 by mosesman

Traditional banks hold roughly half of the $929 billion in commercial mortgages set to hit maturity this year. That total is a 28% increase from the $728 billion that matured in 2023

Will Empty Offices Cause the Next Banking Crisis? Commercial Real Estate ‘Debt Bomb’ of $929 Billion Comes Due this Year with HUNDREDS of Banks Facing Insolvency Runs If Default Rates on the Loans Spike
by KEITH GRIFFITH FOR DAILYMAIL.COM, https://www.dailymail.co.uk/
* Some $929 billion in commercial real estate loans will come due in 2024
* About 14% of all CRE loans and 44% of office loans appear to be underwater
* Recent study warns of widespread risk of bank failures if defaults spike to 10%
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Experts are sounding alarms that the distressed US commercial real estate market could trigger a new banking crisis, if default rates on commercial mortgages rise sharply. Some $929 billion of outstanding commercial mortgages held by lenders and investors will mature in 2024, or 20 percent of the $4.7 trillion total outstanding debt, according to recent data from the Mortgage Bankers Association. Meanwhile, higher interest rates are battering commercial real estate (CRE) property values across the board, with office buildings hit particularly hard due to the enduring popularity of remote and hybrid working.
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