In December, approximately $319.8 million of CMBS office debt reached its fully extended maturity date, the second-lowest monthly amount this year, according to Moody’s Analytics.
The payoff rate for December came in at 39.6 percent, bringing the fourth-quarter rate to 50.5 percent. The year-to-date payoff rate increased by 0.1 percent to finish the year at 35.2 percent. In this month’s spotlight, we look at how that compares to prior years.
Of the loans that have failed to pay off at maturity in 2023, less than half have managed to secure formal extensions from special servicers. The remainder, approximately $3.1 billion, will be some combination of workout/extension or default/liquidation. While the number of defaults resulting in liquidations was low in 2023, that count will likely grow in 2024, revealing trends in the magnitude of value discounts that troubled office assets will experience as the dust settles.
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