Post-COVID construction flooded the market with Class A space offered at discounts, pushing tenants up from Class B and squeezing affordable Class C housing. Interest rates rose faster than any time in history, and nearly every floating-rate bridge loan from 2020 to 2022 is now in default, threatening syndicators and operators across commercial real estate.
this nasty little word that most of us talk about. It's called absorption, right? So the fact that we had all of this new construction come online that was stalled out during COVID in a lot of these markets, and now we can't see rent stabilization because the guys that own the Class A that's now online, they're giving concessions. And so people that were normally in B class are now living in A class. And what does that do to the workforce housing sector from the Class C? All of those things. Plus, thanks, Jerome. Thanks. Thanks. We are the victim. The CRE syndicator operators in CRE, this massive rapid rate increase that had never happened in US history. Plus couple that with costs of insurance and the hedge market and floating rates. I can confidently tell you that almost every floating rate bridge loan that closed between 2020 and 2022 is in default right now. It's in default.
