Older Offices Most at Risk of Loan Default; Post-2015 Buildings Face Least Risk: Data

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KBRA, New York, said in the current office environment, older buildings are seeing particular challenges.

When analyzing the CMBS 2.0 office population within conduit, single borrower (SB) and large loan (LL) deals based on year built, KBRA found that older office buildings are generally associated with higher rates of delinquent or specially serviced current loans, which it defines as the overall “distress rate.” The CMBS 2.0 distress rate indicates no distress for properties built 2015 and later, but 10.9% for properties built before 1960.

Those pre-1960 properties make up 13.5% of the total property count.

The largest chunk–buildings constructed in the 1980s–make up 30.1% of the total property count and a 7.4% distress rate.

The overall distress rate by both property count and loan balance is 7.2%.

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