How high will the commercial real estate default rate get in 2024?
9
8
7
6
5
4
3
2
1
0
.
9
8
7
6
5
4
3
2
1
0
▼ 00
9
8
7
6
5
4
3
2
1
0
.
9
8
7
6
5
4
3
2
1
0
6H
1D
1W
1M
ALL
By Dec 2024 (+0)
$45,181vol
Above 1%
Yes
Above 2%
No
Above 3%
No
2 more markets
Rules summary for
Above 1%
If the delinquency rates for commercial real estate loans by the end of 2024 in any quarter are greater than 1%, then the market resolves to Yes. Outcome verified from Federal Reserve.
Expiration value: YesTimeline and payout
About
Commercial real estate faces a significant challenge as a $1.5 trillion "Wall of Debt" is set to mature by the end of 2025. These loans, taken out in a low-interest rate environment, now face higher rates. Meanwhile, office vacancy rates have surged due to the transition to remote work. This double squeeze may lead to a spike in defaults, posing risks to the broader economy. Delinquencies reached 8.94% in 2010 after the 2007-08 financial crisis and 12.08% in 1991 after the 1980s real estate overbuild. As of Q4 2023, delinquencies are low, around 1.1%.
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