Study of commercial real estate
- 09/23/2024 – The Rate Cut Won’t Save These Real-Estate Owners – WSJ Many commercial-property owners borrowed too much when rates were super cheap and are struggling to hold on to assets they need to refinance
Commercial-real-estate owners are cheering as interest rates finally start to fall. Yet relief is coming too late for many highly indebted property investors like the owners of 145 South Wells, an office tower in downtown Chicago.
Banks, partly under pressure from regulators, are clearing more bad loans off their books through lender-induced selloffs, said Chad Lavender, an executive at the Newmark commercial-real-estate company. And other lenders think they might be better off taking control of a property rather than continuing to let borrowers miss payments.
“As rates come in and values improve, the incentives to wait diminish,” said Richard Mack, chief executive of Mack Real Estate Credit Strategies, a commercial-property lender.
