by Wolf Richter, Wolf Street:
CMBS get to eat it all: Amid overvalued vacant collateral, there is a new thingy: Tenants delaying rent payments and landlords asking for forbearance.
The office segment of the commercial real estate market – and the debt and the commercial mortgage-backed securities (CMBS) that are backed by it – are going through serious gyrations on a combination of factors. Companies have figured out how to make work-from-home manageable. Other companies are moving out, leaving buildings vacant, or are deferring rent payments. Landlords whose cashflow from rents has suddenly crashed are failing to make their mortgage payments or are asking for forbearance. And CMBS are at the receiving end of the process.