Though office vacancy has risen from 11 percent in late 2019 to 17 percent today in the United States, only 3.5 percent of all office deals in 2023 stemmed from a distressed seller, reported Carol Ryan in the Wall Street Journal.
As leases continue to expire and companies reevaluate their office needs, vacancies and cash flows may lead to a greater number of underperforming office assets.
Ryan also alluded to the fact that many lenders are being forgiving to borrowers because they don’t want to force sales into today’s market, where properties would transact for significant losses.
Obsolete offices face the most difficult headwinds, but for high-tech, environmentally sound and accommodative spaces, opportunities exist for investors with capital on hand.
To read the full story at the Wall Street Journal, click here.
