Commercial Foreclosures Up Year-over-Year, ATTOM Finds

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Commercial real estate foreclosures remain elevated and are still considerably higher than pre-pandemic figures, according to ATTOM, Irvine, Calif.

Foreclosure numbers on commercial properties saw a sharp increase starting in June 2023 and peaked at 752 in May 2024, before settling at 695 in ATTOM’s most recent data. “This recent surge suggests renewed financial stress or changes in commercial real estate dynamics,” the report said.

Historical Commercial Foreclosure Overview

ATTOM noted the historical data on commercial foreclosure activity from January 2014 through September 2024 reflects significant fluctuations, largely shaped by economic conditions and major events such as the COVID-19 pandemic. The period from 2014 to 2015 was marked by consistently high commercial foreclosure numbers, peaking at 889 commercial foreclosures in October 2014. “This early surge points to heightened financial distress in the commercial real estate sector during that time,” the report said. “However, a gradual decline began in 2016, with monthly commercial foreclosure totals falling below 500 by late 2016, continuing this trend into the years before the pandemic.”

The COVID-19 pandemic is clearly reflected in the data for 2020. By April 2020, commercial foreclosure activity plummeted to just 144 as government interventions, moratoriums and economic relief efforts took hold. “However, as pandemic-related measures were lifted and economic pressures resurfaced, commercial foreclosures began to rise again by mid-2021,” ATTOM said.

By June of last year, commercial foreclosure activity surged, with numbers steadily climbing to May 2024’s peak of 752. “This recent surge likely reflects ongoing financial challenges in the commercial real estate market, with factors such as rising interest rates, inflation and shifts in demand for commercial spaces contributing to the increase,” the report noted. “As of September 2024, the total stands at 695, signaling continued high commercial foreclosure activity, although slightly lower than earlier in the year.”