As we enter our ninth month of the COVID-19 pandemic, the negative effects of the coronavirus on commercial real estate are becoming evident. One of the most visible indicators has been the elevated CMBS delinquency rate which reached a record level in June 2020. Though that number has started to decline over the last several months, the rate of loans in special servicing remains at recent peak levels. Performance, however, has varied significantly across property types, and the timing of COVID-19 presents a unique challenge to the market as it coincides with several structural shifts taking place. While the pandemic has the potential to accelerate these trends, there is a high level of uncertainty as to what extent commercial real estate will be affected longer-term.
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