American office delinquencies are shooting up

Problems are now starting to spread. In July lending worth 8% of the value of mortgage securities backed by offices were delinquent, the highest since 2013 and exceeding those on even long-troubled retail-property securities (see chart). Loans taken out by property firms in the low-interest heyday of the pre-pandemic years, bundled into such securities, are now coming up for refinancing. This will pose tough questions for financial institutions.