Commercial mortgage-backed securities are particularly important for CRE these days. Bad news about defaults could mean that already high interest rates could start to increase even more.
Many banks have pulled back from lending. They've been concerned over asset valuations and the potential that nervous depositors might pull their money. That could lead to potential solvency questions, as happened to some high-profile banks in 2023.
Simultaneously, many properties that had been purchased in 2021 and 2022, with market-inflated prices, low interest rates, and high leverage are coming up for refinancing. Frequently, higher-rate financing alternatives like CMBS were the only practically available choices.
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