Q1 of 2024 will mark almost four years since the start of the COVID-19 pandemic, and since then, the commercial real estate industry has seen a myriad of impactful changes that continue to fluctuate. Many lenders with loans secured by commercial real estate may wonder what the year will bring, and whether they have options if the forecast should mean preparing for increased commercial foreclosures in 2024.
The industry professionals at Total Lender Solutions have been at the forefront of commercial real estate throughout some of the most substantial economic changes of the last fifteen years. If your lending business has questions or concerns about the state of commercial real estate, read below to hear our expertise.
Outlook of Commercial Real Estate for 2024
2023 saw interesting patterns regarding commercial real estate – some of which were expected, while other patterns were not. In many industries that were optimistically expected to return to 2019 levels, such as office and multifamily units, experts in many large cities did not see the numbers they were expecting. Despite that, lending trended upwards in the second half of 2023, predicting that experts have confidence in the current trajectory.
Based on previous data and predicted trends, here is a breakdown of our 2024 outlook:
- We are predicting a continuously slow return to office spaces. Despite a slow return to these places after the pandemic, office occupancy levels reached an all-time high in 2023. As alternative work solutions become more sophisticated and more companies adopt these advancements, the office industry will be forced to make major shifts to remain stable. Read more about office vacancies on our blog.
- More apartments were built in 2023, but net absorption remained low, causing rent increases to slow. The market for renting multifamily units is expected to remain strong as mortgage rates continue to rise. Read also: Increase of Multifamily Apartments Foreclosing in Texas
- Retail buildings, especially those occupied by major chains, are seeing a wave of closures across the U.S., with many closures going into effect at the start of 2024. This is due to many reasons, including exorbitant rent prices, the rise of online shopping, and heightened crime rates. Read more about retail store closures.
The commercial real estate industry enjoyed low foreclosure rates since 2008, partnered with abundant capital and low interest rates. However, we believe that this has left many lending professionals with little knowledge or experience in enacting a commercial foreclosure. As higher interest rates, increased capital costs, and tightening credit are causing a rise in defaults on CRE loans, foreclosures are expected to surge.
How to Prepare for Increased Commercial Foreclosures in 2024
Staying ahead and informed is essential when confronting the challenges that 2024 may bring. Employ the services of third-party foreclosure experts such as Total Lender Solutions. Our dedicated team specializes in managing foreclosures on behalf of lenders, enabling your team to serve your clients while mitigating the risks associated with foreclosure
Our seasoned team has a deep understanding of the nonjudicial process in seven states (Texas, California, Arizona, Nevada, Oregon, Missouri, and Washington.) Partner with Total Lender Solutions and secure your personalized Foreclosure Action Plan. Our experienced team is here to steer you through the process and work with you to achieve the most favorable outcome.
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