Publications

Trepp report examines parallels between retail and office sectors
Real Estate - DECEMBER 28, 2021

To read this full article you need to be subscribed to Newsline.

Sign in Sign up for a FREE subscription

Trepp report examines parallels between retail and office sectors

by Released

In a recent report, Trepp has compared the demise of the regional and superregional mall to another commercial real estate asset class, office.

Trepp is currently tracking approximately $53.3 billion in regional and superregional mall loans in the United States. Of the $53.3 billion, $35.9 billion comprises full-term interest-only loans. Trepp also tracks approximately $184.5 billion in office loans, $130.7 billion of which are full-term interest-only.

“A large percentage of both mall and office loans are financed the same way. This financing structure is the key to the ‘hindsight is 20/20’ concept,” said Lonnie Hendry, Trepp's head of advisory services. “We've seen many of these mall properties go into REO or foreclosure status. While we aren't predicting the same fate for all office loans financed this way, it does bear following whether some office assets will see the same fate.”

In Trepp’s analysis, the parallels in loan structure stood out as

Forgot your username or password?