The Wall Street Journal (WSJ) reports that U.S. office vacancy rates reached 12.9%, higher than the worst of 2008. With remote-work and e-commerce reducing demand for office and retail spaces as interest rates rise, the WSJ compares today’s conditions to 1970s when new technology resulted in a shift to the suburbs and high interest rates followed a prolonged period of high inflation. While property values bounced back after the earlier meltdowns, today’s secular changes to the way people live and work may mean a weaker recovery for the sector. The upside, says WSJ, is that owners of CRE “mostly hold less debt as a share of property values than they did in 2008.”
Remote Work and E-Commerce –Commercial Real Estate’s Rebound Might Not Happen This Time
Published on April 28, 2023
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