The article (June 23, 2023) harkens back to my days at American Savings as REO Manager in the last century during the savings and loan meltdown and the subsequent creation of the Resolution Trust Company (RTC) to manage all of the distress. Prior to American being taken over, the lender was acutely aware of a myriad of factors measuring the institution’s financial health. One of the key indicators, if not THE key indicator,  that the loan servicing group used preach feverishly about was the percentage level of non-performing loans. Anything under one percent was acceptable. Two percent was ok…not great…but ok. Three percent started to suggest a problem was brewing. Four percent set the alarm bells off. And five percent was a DEFCON 1. The article states, “…CRE mortgage delinquencies rose to 3.00% in the first three months of 2023, according to the Mortgage Bankers Association.” The MSCI Real Assets Report, cited by Bloomberg, reports $64 billion in properties that need to be sold as they can’t afford to pay their mortgages. Another $155 billion is presumably coming. Big numbers to be sure. Retail is most challenged. The article suggests that the value of commercial real estate (office) could plumet by as much as 40% from their peak, a fate worse than the 2009 financial crisis.