The CRE Lending Problem
First, there was the global pandemic in 2020. Then it was the Federal Reserve raising interest rates starting in 2022. Now in the first quarter of 2023, the commercial real estate industry finds itself beginning to accumulate distressed assets and non-performing loans, not exactly drowning in them, but nervously watching the tides rise. In fact, according to Trepp, the industry’s largest commercially available database of securitized mortgages, of the $270 billion of bank commercial real estate loans maturing in 2023, about $80 billion (30%) are backed by office properties. Given the liquidity challenges facing the banking sector, all eyes have turned toward these short-term loans. To compound the issue, the Trepp data also shows an 80 basis-point increase in CMBS office delinquency between December 2022 and February 2023.
How Bad Is It?
Where is this happening? The top five states for increased office delinquencies were Pennsylvania, North Carolina, Mississippi, South Carolina, and the District of Columbia, with specific problem points. Meanwhile, the states with the biggest increases in retail delinquencies were Missouri, Indiana, Virginia, New Mexico, and Ohio.
It Gets Worse?
Not to be outdone by problems in the commercial office real estate sector, Retail Dive reported that the retail sector actually leads corporate defaults. According to their data, retail has 30% of a global tally of defaults that were at their highest since 2009.
This rise in distressed assets and non-performing loans, in both commercial office and retail buildings, highlights the need for CRE lenders to be proactively staffed. They need to have the right people in place BEFORE the loans stop performing, to manage these assets and ensure that they can turn them around or manage them effectively. This is where TalentWoo Real Estate Staffing comes in.
TalentWoo helps lenders and banks with an outsourced recruiting process (RPO) that speeds up hiring, and increases talent acquisition efficiency. Last year our real estate staffing firm made 229 hires in the loan servicing industry, with average days to fill between 30 to 45 days. These roles filled include Administrative Services Manager, Collections Specialist, Customer Advocacy Specialist, Escrow Officer/Closer, Loan Resolution Specialist, Loss Mitigation SPOC, Title Analyst, and VP Internal Audit, among others.
This huge impact on talent acquisition in the non-performing loan industry cannot be overstated. By using an RPO model, lenders can have access to a wide pool of candidates and ensure that they are hiring the best people for the job. TalentWoo’s expertise in the real estate industry allows them to source the right talent from a niche talent pool, curated over years, and with the required experience and skills in managing distressed assets and non-performing loans.
Yes, with growing vacancies and rising interest rates, the commercial and retail real estate industries are facing significant challenges, strong headwinds, and an uphill climb all at the same time. Proactive executives know that their organizations need to be proactively staffed to face the obstacles that are surely coming. TalentWoo Real Estate Staffing’s outsourced recruiting model (RPO) is the solution for high-volume talent acquisition in the non-performing loan industry; TalentWoo’s executive search service is the solution for high-level leadership hiring. By providing access to a wide pool of candidates and expertise in the real estate industry, TalentWoo can help lenders hire the best people for the job and manage their distressed assets and non-performing loans successfully.