Conditions are not ideal for the distressed debt market to take off like investors have been hoping, according to Lauren Gerdes, real estate senior analyst with RSM US LLP.
Data reported by the Federal Reserve shows defaults on commercial real estate loans remained below 1% through Q3 2022, with rental rates tracking at elevated levels across all sectors maintaining cash flow.
"With a recession on the horizon, we will likely see a slight increase in defaults in 2023 as interest rates rise further in Q1 and are expected to hold through the end of the year coupled with a slowdown in rent growth," she tells GlobeSt.com.
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