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Office Buildings’ Fire Sale Not Sparking Yet

Published on March 22, 2024

The Wall Street Journal reports that 2023 saw only 3.5% of office building sales coming from distressed sellers, based on MSCI Real Assets analysis. Of the $35.8 billion of office loans that came due in commercial mortgage-backed securities last year, most were extended, paid off, modified, or have turned to distressed debt investors. Of roughly 600 CMBS office loans that have defaulted in the last two years, only five lenders have realized a loss. However, the wave of sales, when it does come, may further decrease office values that have already fallen 35%.

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