The growing number of distressed office buildings reflects a recognition by owners and lenders that the robust return to office they had hoped for isn't likely to materialize
is preparing to"give the keys back" on multiple office buildings to the holders of their debt.
. Hendry noted that some segments of the office market may be in a down cycle for the next five to 10 years. Over this year and next year, 24% of commercial real estate loans will be coming due, many of them office loans, per Hendry. These loan maturities will be inciting events for many owners. Some of this underwriting was done in the halcyon prepandemic days, when office was one of commercial real estate's strongest assets. Office buildings, from the newest and shiniest Class A towers to the older and less-sexy Class B buildings, were a pretty safe investment, as long as they were in the right locales.
"It also speaks to how long-term these owners think this office-market depression can last in some of these markets," Hendry said in response.
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