Tag: vacancies

Cloud Hangs over Commercial Real Estate as Trillions in Debt Set to Come Due

Connecticut Star Staff
Commercial Real Estate

Commercial real estate is facing a mountain of debt that many borrowers could have trouble refinancing due to a rapid hike in interest rates and record vacancies, according to The Wall Street Journal.

Around $2.81 trillion in commercial real estate loans are set to expire through 2028, meaning borrowers would either have to pay the amount outright or refinance the debt with higher interest rates, according to data from market research group Trepp. Payments on commercial mortgages are typically only for interest while the loan is active, and when the loan reaches its expiration date, borrowers often refinance at current rates, but doing so would increase payments drastically in a time when commercial developers and property owners are strapped for cash, according to the WSJ.

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Vacancies Skyrocket as Renters Abandon the Market

Admin

Elevated rental prices are pushing apartment vacancy rates up, following a pandemic-related housing boom, the Wall Street Journal reported Tuesday.

The price of apartments has risen 25% in the past two years, driven by a combination of inflation and rising demand as young workers sought to enter the rental market following the release of COVID-19 vaccines in the first half of 2021, the WSJ reported. In the third quarter, demand for apartments, as measured by one-year change in unit occupancy, is at the lowest level since 2009, and vacancies rose from 5.1% in the second quarter two to 5.5% in the third.

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