Commercial real estate’s looming distress problem

About $126B worth of commercial properties could sell at distressed prices

National /
Dec.December 15, 2020 08:52 AM
Sales of distressed properties could reach $321B in the next five years. (iStock)

Sales of distressed properties could reach $321B in the next five years. (iStock)

Covid-19’s effect on commercial real estate will continue long after 2020 comes to a close.

About $126 billion worth of properties within the sector — hotels, offices and retail spaces, to name a few — will sell at distressed prices by 2022, Bloomberg News reported, citing data from CoStar Group. That’s higher than what came onto the market in the two years following the Great Recession in 2008.

Sales of these troubled assets could hit as much as $321 billion by 2025 — and in a worst case situation, the total could reach $659 billion, according to a CoStar.

Mortgage delinquencies for hotels and retail assets are skyrocketing due to the pandemic. On the office side of things, it remains unclear when, or even if, companies will will bring employees back once it’s safe to do so, but some are predicting hefty losses.

Private equity and hedge funds have raised billions of dollars to pour into these distressed real estate assets.

[Bloomberg]  — Keith Larsen


Related Articles

arrow_forward_ios
KKR founders Henry Kravis, George Roberts step down as co-CEOs
KKR founders Henry Kravis, George Roberts step down as co-CEOs
KKR founders Henry Kravis, George Roberts step down as co-CEOs
Real estate’s richest get richer on Forbes’ billionaire list
Real estate’s richest get richer on Forbes’ billionaire list
Real estate’s richest get richer on Forbes’ billionaire list
After Newmark partnership ends, Knight Frank inks deal with Cresa
After Newmark partnership ends, Knight Frank inks deal with Cresa
After Newmark partnership ends, Knight Frank inks deal with Cresa
The hotel recovery is far from complete
The hotel recovery is far from complete
The hotel recovery is far from complete
HFZ, partners put historic Detroit building on the market
HFZ, partners put historic Detroit building on the market
HFZ, partners put historic Detroit building on the market
These hotel markets have entered a depression
These hotel markets have entered a depression
These hotel markets have entered a depression
Cherre CEO L.D. Salmanson (Cherre/Facebook)
Real estate data firm Cherre raises $50M
Real estate data firm Cherre raises $50M
(Tropicana Las Vegas via Facebook, Bally's Corp)
Bally’s buys Las Vegas’ Tropicana casino for $150M
Bally’s buys Las Vegas’ Tropicana casino for $150M
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...