Despite historic stimulus measures deployed to combat the pandemic’s economic interruption, many small businesses are still struggling to remain open. If this trend continues, properties could eventually fall into foreclosure, creating steep losses for institutional investors exposed to commercial mortgage-backed securities (CMBS).
Commercial delinquency rates have jumped to levels not seen since 2012 - needless to say, the current velocity of the uptick in delinquencies is troubling. For some perspective, consider that it took well over two years following the 2009 housing crisis for delinquency rates to reach levels that the Covid-19 interruption is nearing in only three short months.
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