CRE Exchange: Commercial Real Estate, Property Valuations, Real Estate Analytics and Property Tax
US CRE debt market: 2024 recap and 2025 outlook with Stephen Buschbom
Jan 30, 2025
Stephen Buschbom, a real estate finance lecturer at Clemson University and co-host of The TreppWire Podcast, returns to share his insights on the U.S. debt market. He reflects on his 2024 predictions and analyzes key trends like maturity defaults and regional market dynamics in Washington, DC, and San Francisco. The conversation extends to economic scenarios that could shape 2025, along with challenges faced by the insurance market and their implications for real estate financing. Exciting forecasts for commercial mortgage-backed securities also highlight potential market shifts.
47:08
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Quick takeaways
- The 2024 U.S. commercial real estate market exhibited resilience amid rising treasury yields, leading to concerns about maturity defaults and loan performance.
- Future market behavior will hinge on monitoring modified loans and the impact of regulatory changes influenced by geopolitical dynamics and economic policies.
Deep dives
Market Overview and 2024 Trends
In 2024, the U.S. commercial real estate market showed a complex landscape with rising treasury yields and tight credit spreads, yet a favorable overall performance with the stock market returning 25%. Despite the robust environment, real estate investment trusts (REITs) lagged with a modest 5% return, indicating sector-specific challenges. The rise in corporate bond issuance, particularly in high-yield segments, signaled a healthier appetite for risk among investors. Attention was drawn to the increasing maturity defaults and the looming maturity wall, with concerns over loan modifications and performance being pivotal moving forward in 2025.
