Commercial real-estate (CRE) has been suffering from the increase in remote work, rising interest rates and subsequently higher mortgage costs to landlords. Occupancy rates in class-B/C commercial office spaces have been dropping since Q4 2021. Class-A spaces have fared better up until now. High-end offices’ occupancy rates fell in Q4 of 2023 for the first time since 2021, according to Moody’s Analytics. Analysts expect office defaults to increase as higher interest rates limit refinancing options on expiring mortgages signed before the pandemic. Around $2.6 trillion in commercial mortgages are set to mature between 2023 and 2027, with many of these loans held by smaller banks.
Post-Covid Office Space Crisis Reaches Class-A Properties
Published on March 31, 2023
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