Kevin Fagan | Source | Head of CRE Economic Analysis at Moody's
Kevin Fagan
Kevin Fagan is a senior director and Head of CRE Economic Analysis at Moody’s Analytics, responsible for research, product development and strategic initiatives for the MA CRE group. He was formerly director of research in the Moody’s Investors Service CMBS team for ten years. Prior to joining Moody’s Analytics, Mr. Fagan held CRE research roles at ING Clarion and Jones Lang LaSalle. He also practiced as a structural engineer, designing large scale commercial buildings in California. Mr. Fagan holds an M.S. in commercial real estate development and finance from the Massachusetts Institute of Technology and a B.S. in architectural engineering from the University of Texas at Austin.
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Moody's
Head of CRE Economic Analysis
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“A lot of what’s going to drive next year is just continued maturities,” or debt coming due at a time when refinancing isn’t so cheap, said Kevin Fagan, head of commercial real estate analysis at Moody’s Analytics. This year, Fagan said, banks and other lenders have offered a lot of extensions and workout agreements to property owners, but that generosity won’t last forever.
In his view, vacancies will start to fall in the years after 2025. Still, we’re not in the clear by any means. “It’s going to be a rough year for office next year…the maturities that are coming through, we’re seeing about 75% of them are going to be in trouble,” Fagan said. He said they will likely have low revenue (in the form of rents) relative to their loan amount, among other factors that lenders find undesirable, and will be hard to refinance for borrowers without putting a lot more equity in. “It’s going to be a pretty bloody headline year,” Fagan said.