Distressed Commercial Real Estate is Attractive to Buyers with Abundant Cash Resources

Regional banks and lenders fret over commercial real estate volatility, while investors eye distressed properties. Preqin data show $544 billion in cash reserves held by global real estate funds managed by private equity firms, up from $457 billion in 2022. Rising debt-service costs pressure office, hotel, and apartment owners, with distress in commercial properties reaching $85.8 billion by 2023 according to MSCI Real Assets data. Despite over $2.2 trillion in commercial mortgages maturing by 2027, the availability of capital for distressed assets alleviates concerns, indicating a less severe crisis compared to 2008-2009.

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