In December 2023, Moody’s report revealed that the overall CMBS office loan payoff rate was 40%. Small loans ($100mm) only had a rate of 29%. The month also saw the second-lowest amount of $319.8 million in fully extended maturity dates for CMBS office debt. In Q4, the payoff rate was at its highest with 50.5%, but unfortunately, it still resulted in a year-to-date record low of timely payoffs at just 35.2%.
Out of all the loans that failed to pay off on time in this period, less than half were able to secure formal extensions while others (approximately $3.1 billion) will likely face workout/extension or default/liquidation scenarios which could indicate potential trends towards value discounts for troubled office assets.
This marks as one worst years on record for CMBS Office Maturities and highlights concerning patterns within this sector’s loan repayments.
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