The beginnings of a secondary market loan sales cycle

The $2 trillion of commercial real estate maturities are coming due in the period between now and the end of 2025. With bid-ask gaps persisting and delinquencies building, “in regard to secondary market loan sales, it feels like we’re still in the early innings,” said Jack Howard, executive vice president, loan and portfolio sales, at CBRE, during CBRE’s recent client call titled “How Much Stress Is Likely on the Road to Distress.”

While there has been increased loan sale activity this year, “the deluge of loan sales is only starting to present itself, and we expect the majority of the volume will commence in 2024 and continue for the next 36 to 48 months,” said Howard.

Estimated secondary market loan sales are in the $7 billion to $10 billion range for 2023. In 2024, said Howard, those numbers are expected to grow to between $10 billion and $25 billion. That volume of loan sales is comparable to the period spanning 2010 to 2016, when annual loan sales