CRE debt performance: Income vs credit loss

Source: Giliberto-Levy Commercial Mortgage Performance Index. Annual returns as of December 31, 2024.
- A sharp rise in long-term rates this week highlighted the challenge investors face finding stable sources of income. The Bloomberg U.S. Aggregate Index is down -1.68% month-to-date as rate volatility persists amid an uncertain economic outlook.1
- Commercial real estate (CRE) debt has historically provided consistent income with minimal credit losses—even during the depths of the Global Financial Crisis, as the chart shows.2
- While the CRE market has faced its own set of headwinds over the past two years, fundamentals appear to be turning a corner, with transaction volumes and prices stabilizing in 2025.
- The need for capital to refinance maturing loans is substantial. Roughly $2 trillion in CRE debt—about a third of all outstanding—will mature by the end of 2027.3 This represents a significant opportunity for lenders to refinance existing loans at lender-friendly terms or originate new loans.