Office Distress Still Low, But Lease Expirations, Maturing Loans Loom Large

By Miriam Hall

The coronavirus pandemic has not yet caused major distress for office owners, but the billions of loans out on properties with leases in their final stretch show just how much is at risk in the country’s priciest office markets.

Borrowers of about $3.3B in commercial mortgage-backed securities debt across 125 loans and 245 properties have requested forbearances so far, according to a joint Trepp and Compstak report released this month.

Roughly $27.7B of the $145B CMBS office loans Trepp tracks are set to mature by 2022. What’s more, nearly 35% of the total loan pool, or $50B, has exposure to a major tenant with a lease that will expire by the end of 2022, when many experts predict the economy will still be healing.

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