With COVID vaccines being rolling out in the next few months, the CMBS market is hopeful of a swift recovery of the CRE fundamentals. Since peaking in June, the CMBS delinquency rates have been trending down in last five months (see chart below). While the performance of many properties which were doing well pre-COVID is expected to rebound in 2021, it seems likely that the recovery will be uneven across different property types.
While the timeline of a full economic recovery is still uncertain, the market is growing optimistic in a strong rebound of industries like hospitality and tourism, and starts to look past the pandemic for CRE sectors in 2021. That said, we see bifurcations in recovery within each individual property type.
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