$626B in CRE Debt Maturing in the Next Two Years is Potentially Troubled

A somber portrait of the state of U.S. capital markets and their impact on CRE emerges from Newmark’s second quarter Capital Report. It depicts a landscape of low loan originations, fewer lenders, underwater loans, troubled debt about to mature, and rising cap rates across a wide swath of the CRE spectrum.

Loans are hard to get in this new world. CRE debt origination is down 52% in 1H 2023 compared to the prior year and 31% compared to before the pandemic. Equally concerning, there are 32% fewer active lenders in the market today compared to a year ago. “The small and regional bank lending engine that has driven the CRE market is rapidly slowing with no clear replacement,” the report noted.