A trend towards hybrid and remote work since the pandemic may cut $800 billion from office property values by the end of the decade, according to a recent study by consulting firm McKinsey. McKinsey said that employees continued to spend far less time working at the office compared to the pre-pandemic era, The survey, published on July…

A trend towards hybrid and remote work since the pandemic may cut $800 billion from office property values by the end of the decade, according to a recent study by consulting firm McKinsey. McKinsey said that employees continued to spend far less time working at the office compared to the pre-pandemic era, The survey, published on July…

Commentary Commercial real estate faces increasing headwinds. Delinquency rates, especially for office buildings, have spiked and show signs of climbing still higher. Both developers and lenders are set to lose. The pain is passing through to those who hold bonds backed by commercial mortgages, the so-called commercial mortgage bond securities (CMBS). There is little sign…

The work-from-home trend has been taking its toll on office landlords and is now making its way through to banks’ commercial loan portfolios, leading some analysts to predict that more trauma could be on the way for regional banks this year. And in the current climate of bank failures, short sellers, and nervous depositors, banks…

Commercial real estate in the United States is facing uncertainty, with mixed signals from traditional economic bellwethers like housing and employment contributing to the lack of clarity, and lingering fears of recession leave the predictions open-ended, according to a recent forecast by the University of California–Los Angeles Anderson School of Business, which included estimates for…

Office vacancy rates in San Francisco continue to climb, with new records being set monthly as businesses continue to flee and office workers resist a return to the city, according to experts. Vacancy rates reportedly surpassed 31 percent in May, the highest ever recorded in the city—historically known as an attractive location for businesses, ranking…

Commentary Charlie Munger, believed by some to be the real “brains” behind Berkshire-Hathaway, the multinational investment leviathon helmed by Warren Buffet, recently told The Financial Times, “We have a lot of troubled office buildings, a lot of troubled shopping centres, a lot of troubled other properties. There’s a lot of agony out there” in real…

News Analysis A storm is brewing in the U.S. commercial real estate market, says Charles Munger, vice chair of Berkshire Hathaway. During an interview, the 99-year-old legendary investor told the Financial Times that U.S. banks have plenty of “bad loans” and will be vulnerable when the “bad times come” and commercial property prices crater. “It’s…

Top investors at the annual Milken conference have warned of more economic pain to come after the collapse of First Republic Bank. Attendees at the conference said that the third seizure of a U.S. regional bank by the Federal Deposit Insurance Corporation (FDIC) since March is threatening to constrain credit and accelerate the path toward…

Following the collapse of banks on both coasts last month, financial markets are jittery, and the lingering threat to commercial real estate is significant, with a litany of issues, primarily tracing back to pandemic restrictions, affecting office and retail real estate. Office vacancies are distressing lenders, as evidenced by the February default of Brookfield Asset…