{"id":3832,"date":"2024-07-03T11:32:20","date_gmt":"2024-07-03T11:32:20","guid":{"rendered":"https:\/\/cred-iq.com\/blog\/?p=3832"},"modified":"2024-12-25T02:06:04","modified_gmt":"2024-12-25T02:06:04","slug":"43-average-decline-in-valuations-for-distressed-properties","status":"publish","type":"post","link":"https:\/\/cred-iq.com\/blog\/2024\/07\/03\/43-average-decline-in-valuations-for-distressed-properties\/","title":{"rendered":"43% Average Decline in Valuations for Distressed Properties"},"content":{"rendered":"\n<p><strong>New York City and Office Dominate 1<sup>st<\/sup> Half 2024 Valuation Declines<\/strong><\/p>\n\n\n\n<p>As we pass the halfway point in 2024, CRED iQ analyzed properties that were re-appraised this year and in 2023. &nbsp;Our research team wanted to expose trending and any associated insights of what lies ahead in the second half.&nbsp; Each of these properties were either delinquent or with the special servicer and received updated appraisals in 2023 or 2024.&nbsp;<\/p>\n\n\n\n<p>In total, the average decline in value compared to the original valuation at issuance was -43%, an increase of 140 basis points over our Q4 2023 print.&nbsp;<\/p>\n\n\n\n<p>Our analysis looked at 2024 year-to-date performance and then created rankings for both 2023 and 2024 combined.&nbsp; The combined view offers an important dimension as many key properties in 2024 were last appraised in 2023.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2024\/07\/CRED-iQ-CMBS-Top-2023-and-2024-Valuation-Declines.png\" alt=\"\" class=\"wp-image-3833\" width=\"1309\" height=\"424\" srcset=\"https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2024\/07\/CRED-iQ-CMBS-Top-2023-and-2024-Valuation-Declines.png 960w, https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2024\/07\/CRED-iQ-CMBS-Top-2023-and-2024-Valuation-Declines-300x97.png 300w, https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2024\/07\/CRED-iQ-CMBS-Top-2023-and-2024-Valuation-Declines-768x249.png 768w, https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2024\/07\/CRED-iQ-CMBS-Top-2023-and-2024-Valuation-Declines-696x225.png 696w, https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2024\/07\/CRED-iQ-CMBS-Top-2023-and-2024-Valuation-Declines-150x49.png 150w\" sizes=\"auto, (max-width: 1309px) 100vw, 1309px\" \/><\/figure><\/div>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2024\/07\/CRED-iQ-CMBS-Top-2024-Valuation-Declines.png\" alt=\"\" class=\"wp-image-3834\" width=\"1311\" height=\"467\" srcset=\"https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2024\/07\/CRED-iQ-CMBS-Top-2024-Valuation-Declines.png 960w, https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2024\/07\/CRED-iQ-CMBS-Top-2024-Valuation-Declines-300x107.png 300w, https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2024\/07\/CRED-iQ-CMBS-Top-2024-Valuation-Declines-768x274.png 768w, https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2024\/07\/CRED-iQ-CMBS-Top-2024-Valuation-Declines-696x248.png 696w, https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2024\/07\/CRED-iQ-CMBS-Top-2024-Valuation-Declines-150x53.png 150w\" sizes=\"auto, (max-width: 1311px) 100vw, 1311px\" \/><\/figure><\/div>\n\n\n\n<p><strong>Sector Perspectives<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The top three largest overall declines, not surprisingly, were in the Office sector which also saw the largest single property &nbsp;valuation decline.&nbsp; Within our sample, 2024 declines averaged a 53%<\/li><li>The retail sector was not far behind, notching an average valuation decline of 52%, along with the fourth largest single asset reduction across all property types&nbsp;<\/li><li>The hotel sector saw an average of 40% valuation reduction<\/li><li>Comparing our Q4 2023 report with this analysis, the average multifamily valuation decline remained mostly flat at 35%.&nbsp;&nbsp;Meanwhile, &nbsp;industrial improved from 32% declines to 10% in this current print.&nbsp;<\/li><\/ul>\n\n\n\n<p><strong>Individual Property Performance<\/strong><\/p>\n\n\n\n<p>Looking across the top 10 declining assets for both 2023 and 2024, 6 are office properties, 2 are in the retail sector and 2 are classified as \u201cother\u201d.&nbsp; Half of the top 10 are located in New York City, 2 in California (one each in Los Angeles and San Francisco), and the Midwest was represented by 2 properties in Chicago and 1 in Minneapolis.<\/p>\n\n\n\n<p>With a touch of irony, we take note that the same address digits for the #1 overall asset decliner <a href=\"https:\/\/cred-iq.com\/browse\/Property\/Office\/1740%20Broadway-New%20York-NY-10019\/bway20151740100158051445\" target=\"_blank\" rel=\"noreferrer noopener\">1740 Broadway<\/a>, appear with newcomer<a href=\"https:\/\/cred-iq.com\/browse\/Property\/Office\/1407%20Broadway-New%20York-NY-10018\/bbcms2019bwayD0011071944003\" target=\"_blank\" rel=\"noreferrer noopener\"> 1407 Broadway<\/a> which came in at #6 in the combined analysis.<\/p>\n\n\n\n<p>We see a number of familiar names on the top ten list for properties appraised in 2024 including the number one entry the <a href=\"https:\/\/cred-iq.com\/browse\/Property\/Office\/555%20West%20Fifth%20Street-Los%20Angeles-CA-90013\/gct2021gct1C0011223819014\" target=\"_blank\" rel=\"noreferrer noopener\">Gas Company Tower<\/a>\u2014an office property in Los Angeles and<a rel=\"noreferrer noopener\" href=\"https:\/\/cred-iq.com\/browse\/Property\/Retail\/229%20West%2043rd%20Street-New%20York-NY-10036\/cd2016cd23A0011465414073\" target=\"_blank\"> 229 West 43<sup>rd<\/sup> Street<\/a> which comes in at #3.&nbsp; Just like the combined list, 5 of the top 10 properties are in the office sector, followed by 3 in retail and 2 in the other category.&nbsp;<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About CRED iQ<\/strong><\/h2>\n\n\n\n<p><a href=\"https:\/\/cred-iq.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">CRED iQ<\/a>&nbsp;is an official market data provider for the Commercial Real Estate and financial industries.&nbsp; Powered by over $2.3 trillion in loan and transaction data that includes all property types and geographies.<\/p>\n\n\n\n<p>CRE professionals leverage CRED iQ for a wide spectrum of use cases such as uncovering acquisition &amp; lending opportunities, market analysis, underwriting, and risk management.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>New York City and Office Dominate 1st Half 2024 Valuation Declines As we pass the halfway point in 2024, CRED iQ analyzed properties that were re-appraised this year and in 2023. &nbsp;Our research team wanted to expose trending and any associated insights of what lies ahead in the second half.&nbsp; Each of these properties were [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":3835,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","footnotes":""},"categories":[9],"tags":[4,5,10],"class_list":{"0":"post-3832","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-research","8":"tag-cmbs","9":"tag-commercial-real-estate-data","10":"tag-valuation"},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/posts\/3832","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/comments?post=3832"}],"version-history":[{"count":1,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/posts\/3832\/revisions"}],"predecessor-version":[{"id":4251,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/posts\/3832\/revisions\/4251"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/media\/3835"}],"wp:attachment":[{"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/media?parent=3832"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/categories?post=3832"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/tags?post=3832"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}