Apartment loans with CMBS financing have seen a staggering 185% rise in distress rates since January. Retail and office sectors lead in distress, with rates of 11.7% and 11.5%, respectively. The hotel sector distress rate is 8.1%. Multifamily distress rose to 7.4% (according to CRED IQ).

At Lucrum, our debt advisory team have
successfully represented our borrower
clients to modify over $ 1billion of
commercial real estate
loans, including for office,
hotels, multifamily, senior
living, medical centers and
retail properties
A notable distressed property is the 688,292 SF Equitable Plaza office on Wilshire Boulevard in Los Angeles. According to information on CRED iq, the $87.1 million loan, which failed to pay off at maturity in June 2024, transferred to special servicing. Originally constructed in 1969 and renovated in 1993, the property’s latest performance showed a DSCR of 1.12 and 56.6% occupancy. At underwriting in March 2014, the asset was valued at $150.5 million ($219/SF).
CRED iQ analyzed properties that were reappraised this year and in 2023 by their special servicer. According to this, the average decline in value compared to the original valuation at issuance was minus 43%.
This significant rise in distress rates highlights the need for proactive strategies with lenders.
About Lucrum Realty
At Lucrum Realty, we have successful completed over $1 billion of loan modifications and/or restructurings on behalf of our lender. Common loan modifications include extension of loan maturities, lowering of interest rate cap requirements, forbearance/reductions of interest rate spreads, amortization and other loan principal relief, waiver of late fees; allowing a borrower to access existing reserves; waiver of financial covenants and avoiding foreclosures. Please call a member of our team if we can assist you or your clients.
Lucrum Realty (www.lucrumrealty.com) provides loan advisory, loan modification and restructuring services for lenders and borrowers. The firm’s debt platform is run by Aron Youngerwood, a former CBRE executive who led loan restructurings at CBRE’s debt and investment platform. The Lucrum team includes former CMBS and CLO special servicers, lenders and restructuring experts. Please call a member of our team if we can assist you or your clients.
Aron Youngerwood
Tel: 310-785-9491
Joseph Savitsky
Tel: 212-871-8953
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