(ZEROHEDGE) – In yet another sign that a commercial real estate crisis has arrived, a new report from MSCI Real Asset reveals that distressed properties are piling up as some building owners of malls and office spaces have no choice in a high-interest rate environment but to default.
The report, which Bloomberg first reported, shows the number of distressed assets increased by 10% in the first quarter to nearly $64 billion. The report notes distressed CRE assets could balloon to as much as $155 billion.
These distressed assets are unable to refinance while regional banks are tightening credit standards amid a period of high borrowing costs – and couple that with sliding CRE prices and some properties, such as office space and malls, where vacancy rates are soaring.
