By ERIN FLYNN JAY and KIMBERLEY HAAS
As business models continue to change in the post-Covid economy, some market experts are predicting a commercial real estate crash while others are saying there could be a revival in investment opportunities.
Desmond Lachman, an American Enterprise Institute senior fellow, recently wrote that high vacancy rates have already caused commercial property prices to decline. At the same time, property owners need to roll over around $500 billion in maturing loans at higher interest rates.
Lachman said this spells trouble for the banking sector in general and the regional banks in particular. He predicted commercial real estate troubles could lead to the failure of 385 regional banks.
“With as much as 18% of their…
By CHUCK GREEN
Does anyone need some elbow room?
When COVID appeared to seize control over, well, nearly everything, there seemed to be ample space in offices – including those related to the mortgage industry – across the country. Desks? It was almost as though some hadn’t been occupied in decades.
That scenario is gradually changing. According to the Spring 2023 U.S. Office Occupier Sentiment Survey by CBRE, 65% of respondents say their companies are requiring that employees return to the office.
71% of financial and professional services company respondents said they are required to be back in the office, and most of the companies they work for expect attendance for more than half of the week.
So should mortgage…
By KIMBERLEY HAAS
As the commercial real estate market continues to change, office space is down, but not out, according to an economist who says a majority of companies are still committed to having a place where the “secret sauce” of their business is created.
Richard Barkham, global chief economist for CBRE in Dallas, said it may take up to nine years for the office market to fully recover but it is important to remember that not all of that sector has been badly hit by drops in value.
Barkham said that a large portion of the vacancies are in a minority of the stock, with 80% of the rise in vacancies in 10% of office buildings.
The office buildings…
