Commercial real estate pressured; Office Properties drops; Anywhere Real Estate lower

By Cristal Cody

Tupelo, Miss., Feb. 21 – Junk and distressed commercial real estate names remained pressured in post-holiday secondary bond trading.

Office Properties Income Trust’s bonds softened on Wednesday with the paper trading mostly lower in back-to-back sessions.

The 3.45% senior notes due 2031 (Caa1/CCC) dropped 2 3/8 points on Tuesday and declined over 2 more points on Wednesday to a 44 bid handle, a source said.

Anywhere Real Estate Inc.’s 5¾% senior notes due 2029 (B3/CCC+) fell over ½ point by the close to a 73 bid handle, according to a market source.

Bankrupt WeWork Inc.’s 5% senior notes due 2025 traded flat in thin supply at 3 bid, a source said.

Commercial real estate has faced tighter lending standards from banks in 2024, which now no longer account for the majority of loans, according to a Feb. 15 report from KBRA.

Nonbanks now account for 50% of commercial real estate lending and 79% of residential real estate, KBRA said.

Overall market tone was mixed following the release of the minutes from the Federal Reserve’s January monetary policy meeting.

“The January FOMC minutes reinforced our view that the Fed will take a cautious approach to cutting rates,” according to a BNP Paribas Securities research note on Wednesday. “We still expect the cutting cycle to start in June.”

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