(Daily Caller)—Commercial real estate is facing an exceptionally high number of foreclosures on high-risk loans, an indicator that the sector could face even more foreclosures in the future, according to The Wall Street Journal.
Lenders issued foreclosure notices for 62 high-risk loans in the commercial real estate sector for this year ending in October, double last year’s total and possibly the highest number ever, according to a WSJ analysis. Many of those foreclosures are from mezzanine loans, or high-risk property loans that allow for a shorter time to foreclosure and have higher interest rates, with the shorter time frame giving a more immediate pulse on the health of the sector and forecasting a possible wave of foreclosures in the future on more traditional loans.
“A lot of borrowers have basically said, ‘I can’t hold this asset any longer; I can’t keep putting money in,’” Terri Adler, managing partner at the law firm Adler & Stachenfeld, told the WSJ. “And the lenders have said, ‘OK, we’ll take it back.’”
Commercial real estate foreclosures, while still presently low, are a lagging indicator of the sector’s health, as there can be a gap of a few months to years between a default and a foreclosure on more traditional loans, according to the WSJ. The total dollar amount for mezzanine loan foreclosures, despite the increase, is not known as the loan type does not appear on property records due to its opaque nature.
'Delinquent commercial real estate loans at US banks have hit their highest level in a decade, as higher interest rates, an uncertain economy and the rise of remote working pile pressure on building owners.' https://t.co/DXNOUAOJU3 pic.twitter.com/YtpawnQLQl
— Jesse Felder (@jessefelder) November 9, 2023
Regulators have forced bigger banks to be more cautious since the 2008 financial crisis, where a bubble in the real estate market burst after banks issued an exceptional number of risky loans, leading to the recent rise in mezzanine loans, which avoid this regulation to fill that demand for riskier loans, according to the WSJ. Smaller banks, debt funds or nonbank lenders fill this gap with mezzanine loans that entice lenders with interest rates often above 10%.
Mortgage rates reached a recent peak near the end of October at 7.9%, the highest point since September 2000. Residential home affordability has also suffered, with the average American only being able to afford a 30-year mortgage on a $356,273 house as opposed to that same family being able to afford a $737,392 house in December 2020.
Interest rates across all forms of debt are facing upward pressure from the Federal Reserve’s federal funds rate hikes. The rate has been put in a range of 5.25% and 5.50%, a 22-year high, following a series of 11 hikes in an effort to combat inflation, which peaked at 9.1% in June 2022.
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Why the National Debt Is the Looming Threat to Your Retirement Plans
The Hidden Crisis No One Is Talking About
Every day, headlines warn about inflation, market volatility, and global instability—but the greatest looming threat to your retirement might be something far more fundamental: America’s skyrocketing national debt.
You can learn more about how the national debt affects you by reading this 3-minute report titled, “Debt Will Hit $40T in 2026: Prepare Your Retirement Now“.
With debt growing faster than most Americans can possibly fathom, the government’s borrowing habits have reached historic—and dangerous—levels. To cover spending, Washington is making moves with their budget packages, tariffs, and taxes. Is it enough? No. It’s not even close to what would be necessary to stop out-of-control debt, let alone reverse it.
How Debt Erodes Your Nest Egg
There are only so many levers government and the Federal Reserve can pull to try to protect Americans, assuming that’s even a top priority for them. Unfortunately, pulling one level to relive one pressure invariably adds pressure from another direction. This is why prices keep going up even as inflation reportedly slows.
For retirees and pre-retirees, that’s a perfect storm. The dollars you’ve worked hard to save lose value, and your cost of living increases while your investments lag behind.
If you’re relying solely on paper-based assets—stocks, bonds, or mutual funds—you’re essentially tied to the same system that’s creating the problem. It’s a system that was designed to work well in the 20th century, not in today’s world with people living longer and the dollar rapidly losing value.
This is why the 3-minute report, “Debt Will Hit $40T in 2026: Prepare Your Retirement Now,” is so important.
The Precious Metals Hedge
Thousands of Americans are looking for a tangible, time-tested hedge: physical gold and silver.
Unlike paper assets, precious metals aren’t dependent on government policy or the stock market’s mood swings. They’re real, finite resources that have maintained value for thousands of years through wars, recessions, and inflationary periods.
In fact, during times of high inflation and fiscal instability, gold often performs its best—because it’s seen as a store of value when faith in the dollar weakens. This is why prices have skyrocketed this year and are expected by many economists to continue going up in the future.
Take Control with a Gold IRA
One of the most effective ways to protect your retirement from national debt fallout is through a self-directed Gold IRA. This IRS-approved account lets you hold physical gold and silver within your retirement portfolio, giving you:
- Direct ownership of your assets
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Augusta Precious Metals specializes in helping Americans just like you take this step with confidence. The company has earned a strong reputation for transparency, education, and personalized service—making it one of the most trusted names in the industry.
The Next Step: Secure Your Financial Future
Augusta Precious Metals has helped thousands of Americans with at least $50,000 to invest from their IRAs, 401(K)s, TSPs, and other retirement accounts safeguard their savings through precious metals.
If you’re concerned about what the rising national debt could mean for your future, now is the time to act.
Read this 3-minute report titled, “Debt Will Hit $40T in 2026: Prepare Your Retirement Now“ and learn the simple steps you can take to protect your retirement.