U.S. commercial real estate (CRE) is facing risks posed by higher interest rates that span most property types, according to Fitch Ratings. The office sector, which comprises a low-teen percentage of the total estimated U.S CRE value and has garnered intense investor and lender focus due to secular demand challenges posed by flexible work, is just one of many property formats with higher refinance risk that warrant scrutiny from investors and lenders alike.
A recently published refinance scenario analysis of Fitch-rated U.S CMBS transactions showed loans backed by retail, hotel and mixed-use properties all had greater refi risk than office loans; however the percentage of office loans able to refinance exceeded the average across all property types for all three scenarios analyzed in this report from Fitch Ratings .
Investors and lenders should be aware that CRE refinancing risks extend beyond just the office sector as they consider their investment strategies going forward in light of current market conditions
