Commercial real estate foreclosures increased 97 percent in January 2024 compared to last year, reaching a high that has not been seen in nearly a decade, according to new data.
With 635 commercial foreclosures in January 2024, foreclosures increased 17 percent from December 2023 and 97 percent from January 2023, according to a report last week from property data analyst ATTOM.
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Commercial real estate is facing a mountain of debt that many borrowers could have trouble refinancing due to a rapid hike in interest rates and record vacancies, according to The Wall Street Journal.
Around $2.81 trillion in commercial real estate loans are set to expire through 2028, meaning borrowers would either have to pay the amount outright or refinance the debt with higher interest rates, according to data from market research group Trepp. Payments on commercial mortgages are typically only for interest while the loan is active, and when the loan reaches its expiration date, borrowers often refinance at current rates, but doing so would increase payments drastically in a time when commercial developers and property owners are strapped for cash, according to the WSJ.
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