At a glance
- Trepp's office CMBS delinquency rate climbed to 12.33% in October.
- Third-quarter office leasing rose 4% and vacancy eased, CBRE reported.
- JLL researchers told IREI that AI tenants are mostly filling existing offices, moving due diligence for allocators away from construction risk toward tenant creditworthiness and lease terms.
CBRE counted 1.5 million square feet of office completions in the third quarter, down 76% from a year earlier and on track for the lowest annual total since 1990. Trepp's office CMBS delinquency rate climbed to 12.33% in October.
Third-quarter office leasing rose 4% and vacancy eased, CBRE reported. With completions at that pace, existing buildings remain the primary supply for tenants.
JLL researchers told IREI that AI tenants are mostly filling existing offices, moving due diligence for allocators away from construction risk toward tenant creditworthiness and lease terms.
Trepp's overall CMBS delinquency rate fell 15 basis points to 7.87% in October, helped by one $975 million loan cure, but the office delinquency rate still rose. Green Street's commercial property index fell 0.7% in October. The 10-year Treasury traded near 5%.
Completions collapsed while leasing grew
Office completions in Q3 versus a year earlier, and Q3 leasing growth
Reported by The Wrap desk from CBRE, Trepp, JLL, IREI, Cushman's Mosler, Rudin and Green Street. Published . Corrections