The end of the Federal Reserve’s rate-hiking campaign and increased transaction activity will make 2024 a year of improved transparency and credit access for commercial real estate in the U.S., according to a new research paper by Morris Chen, Director of DoubleLine Capital’s Commercial Mortgage-Backed Securities and Commercial Real Estate Debt team, and Product Specialist Phil Gioia. Among other findings, the paper expects payoff outcomes to persist among “multifamily, industrial and lodging property types, while larger-balanced office loans and struggling mall properties had more difficulties refinancing at maturity.” The paper foresees a constructive “macroeconomic and technical setup heading into 2024” for commercial mortgage-backed securities. DoubleLine’s Commercial Mortgage-Backed Securities and Commercial Real Estate Debt team favors “senior-rated, seasoned conduit bonds that have de-levered over time, exhibit limited extension risk and benefit from well-located nonoffice properties with strong cash flow and sponsorship as well as low refinancing risk.”
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