(Daily Caller)—The commercial real estate sector is facing the possibility of a substantial number of bankruptcies that could ultimately hamper economic recovery and threaten the wounded banking industry, according to experts who spoke to the Daily Caller News Foundation.
Overall 30 day+ delinquencies on commercial mortgage-backed securities (CMBS), meaning the number of borrowers for commercial properties that failed to make a required payment in at least the last 30 days, increased from 2.96% from one year ago to 4.63% as of October, according to a report from market research group Trepp. The delinquencies are indicative of danger in the commercial real estate sector, as they indicate that many of those could become bankruptcies, threatening an already hurting banking industry and exacerbating any economic downturn, according to experts who spoke to the DCNF.
“Commercial real estate is in deep trouble and could constitute a major risk to the banking system and the recovery,” Desmond Lachman, a senior fellow at the American Enterprise Institute, told the DCNF. “In fact, I would characterize the situation as a slow-moving train wreck. The underlying problem is that occupancy rates have slumped post-Covid since many workers are now working at least part of the time from home.”
Vacancy rates for offices have continued to trend up since the COVID-19 pandemic, which forced many businesses to adopt remote work to continue operations — a change many workers have been reluctant to let go of, according to a report from Cushman & Wakefield. In 2019, the vacancy rate hovered around 13% and has increased to around 20% as of the third quarter of 2023.
“The pandemic was an aggravating force that gave the shift from brick-and-mortar to laptop purchasing critical mass 20 years after it began,” Peter Earle, an economist at the American Institute for Economic Research, told the DCNF. “People, even (and especially) those who were suspicious of internet retail or liked the in-person shopping experience, were forced to move their consumption online during lockdowns and under stay-at-home orders. Many of them liked it, came to trust it, and now see little reason to go back to physical establishments.”
Delinquency rates for offices have seen the largest jump among commercial real estate, rising from 1.75% on 30 day+ delinquencies last year to 5.75% as of October 2023, according to Trepp. Industrial property delinquencies increased from 0.43% to 2.56%, and multifamily property delinquencies increased from 0.85% to 2.64% over that same time frame.
Retail delinquencies over the past year have managed to remain mostly stable as they are not hampered by factors like an increasing number of remote workers, according to Trepp. Despite being stable, delinquency rates for retail measured 6.55% in October 2023, lower than one year ago when it was 6.66%, but still greater than any other category in commercial real estate.
“To the extent that a commercial real estate slump creates job losses among staffers and maintenance people, a recession will be exacerbated by bankruptcies or liquidations,” Earle told the DCNF. “The longer-term effects, which would include canceling planned construction or freezing existing projects, would impact the building and materials industries as well. Further negative impacts could materialize if regional banks, which have lent substantial amounts to commercial real estate builders and owners over the past decade or two, find themselves mired in rising loan defaults.”
U.S. banks outside of the top 25 in assets hold around 37.6% of all loans but hold an astonishing 67.2% of all commercial real estate loans as of March, according to Axios. As of the last quarter of 2022, 40% of loan officers were tightening their lending standards in the commercial real estate sector as the industry becomes a riskier bet.
Small and medium-sized banks have been the cause of concern for some following a banking crisis at the beginning of 2023. Silicon Valley Bank collapsed after a bank run in March, with Signature Bank and First Republic Bank following suit, leaving many regional banks to struggle as depositors fled to larger banks that they believed would be a safer bet.
WeWork's $47 billion collapse could be the straw that breaks regional banks.
It could put nearly 600 commercial leases on the block, sticking the landlords — and their banks — with the bill.
Commercial real estate accounts for 30% of regional bank loans — roughly $300 billion.… pic.twitter.com/jxXlDQp6qK
— Peter St Onge, Ph.D. (@profstonge) November 17, 2023
“All of this is particularly bad news for the regional banks since as much as 18% of loans are made to this sector,” Lachman told the DCNF. “If the regional banks have to restrict lending because they are having large loan losses, this could spell trouble for the small and mid-sized companies that are hugely reliant on the regional banks for their credit. And those small and mid-sized companies account for close to half of overall employment.”
The Federal Reserve has raised its federal funds rate to a range of 5.25% and 5.50%, the highest rate in 22 years, after a series of 11 hikes that began in March 2022 in an effort to combat inflation. Inflation peaked at 9.1% in June 2022 and has since decelerated to 3.2% in October, far higher than the Fed’s 2% target.
Amid fears about the struggling industry, lending for commercial and multifamily mortgages dropped 49% year-over-year in the third quarter of 2023, according to Market Insider. The slowdown could be increasingly felt by the broader economy over the next few years, with around $1.5 trillion in debt needing to be paid back as the possibility for defaults increases.
“I think that the commercial real estate sector is a major risk to the economic recovery and that the Fed and the markets do not seem to be paying sufficient attention to this matter,” Lachman told the DCNF.
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Three Reasons a Coffee Gift Set From This Christian Company Is Perfect for Christmas
When you’re searching for a Christmas gift that’s meaningful, useful, and rooted in faith, you don’t want to settle for anything generic. This season is filled with noise — mass-produced products, last-minute picks, and trends that fade as quickly as they appear. But one gift stands apart because it blends genuine quality with a message that matters: a coffee gift set from Promised Grounds Coffee.
This small Christian-owned company has become a favorite among believers who want to support faith-driven businesses while giving friends and family something they’ll actually enjoy. Here are three reasons a Promised Grounds Coffee gift set may be the most thoughtful and impactful present you give this year.
1. It’s Truly Delicious Coffee
Too many “gift-worthy” coffees look beautiful in the package but disappoint when the cup is poured. Promised Grounds takes the opposite approach — exceptional taste first, thoughtful presentation second.
Their beans are sourced with care, roasted in small batches, and crafted to bring out a rich, smooth flavor profile that appeals to both casual drinkers and true coffee lovers. Whether someone enjoys bold, dark roasts or lighter, more delicate blends, every sip reflects quality that stands shoulder-to-shoulder with the biggest specialty brands.
Simply put: this coffee is good. Really good. Some say it’s absolutely fantastic. If you want a gift that won’t be re-gifted, ignored, or shoved in a cabinet, this is it.
2. It Spreads the Word While Serving a Real Purpose
There are many Christian gifts that are meaningful… but not exactly practical. There are also useful gifts that have nothing to do with faith. Promised Grounds Coffee bridges both worlds beautifully.
Each gift set delivers an encouraging, faith-centered message through its packaging and presentation — a simple but powerful reminder of God’s goodness during the Christmas season. The cups are especially popular and serve as a daily reminder of the blessings from our Lord. At the same time, the product itself is something people will actually use and appreciate every single day.
It’s a gift that uplifts the spirit and fills the mug. A gift that points loved ones toward Scripture while still being part of the normal rhythm of life. And in a culture that increasingly pushes faith to the margins, giving a gift that quietly but confidently honors Christ can make a deeper impact than you might expect.
3. It’s Affordable, Valuable, and Elegantly Presented
Many people want to give something meaningful without breaking their Christmas budget. Promised Grounds Coffee strikes that perfect balance — the sets look and feel premium, but the price remains accessible.
The packaging is classy, clean, and gift-ready, making it ideal for:
- Family members of all ages
- Co-workers or employees
- Church friends or small-group leaders
- Hosts, neighbors, and last-minute gift needs
It’s the kind of gift that feels more expensive than it is — and more thoughtful than most of what you’ll find on store shelves.
The Perfect Blend of Faith, Flavor, and Christmas Cheer
A coffee gift set from Promised Grounds Coffee checks every box: a gift that tastes amazing, conveys your faith, supports a Christian business, and brings daily enjoyment to the person who receives it. In a season when so many gifts are forgotten, this one stands out for all the right reasons.
If you want a Christmas present that reflects your values and delivers genuine joy, Promised Grounds Coffee is the perfect place to start.
