In the third quarter of 2023, Trepp reported a significant decline in commercial mortgage origination volumes for bank-held loans. This trend is reflected in increased stress within the commercial real estate (CRE) lending market, as seen through net charge-offs, delinquency rates and occupancy rates.
Overall, new CRE loan originations decreased by $2.2 billion across all property sectors to $2.5 billion in Q3 2023 from $4.7 billion in Q2 according to Trepp’s data analysis. The largest decreases were observed in multifamily and lodging properties.
Emily Yue, a research analyst at Trepp stated that “mortgage underwriting terms for new originations during the third quarter showed greater weakness compared to previous quarters.”
While there have been some positive signs of recovery for lodging and retail sectors over recent months with regards to delinquencies, office sector rates continue on an upward trend. The overall delinquency rate experienced a sharp increase from 1.2% in the previous quarter to 1
