Office sector debt-funding gap is likely to increase

The United States office sector faces a large aggregate future funding gap in the near-term due to lower LTVs and substantial value erosion.

Between 2023-2025, CBRE Econometric Advisors (CBRE EA) forecasts office owners will face a financing gap of $72.7 billion (26.4 percent of the lending volume originated in 2018-2020). This likely will lead to distress for some property investors and force others to inject more cash into their properties.

The heavy concentration in the office sector differentiates the current funding gap from the Global Financial Crisis (GFC), when large funding gaps were prevalent across all major sectors.

CBRE EA first analyzed the burgeoning Office Sector Debt Funding Gap in December 2022.

To read the full report, click here.