Office Vacancy Crisis Threatens Cities and Banks as Remote Work Reshapes Commercial Real Estate

The commercial real estate market faces a financing crisis as landlords struggle to secure reasonable loans. This could spur defaults and harm banks, building owners, and city tax revenues.
Employers like JPMorgan Chase are pushing for office returns to boost productivity and shore up property values, but many employees still resist. Creative incentives may help.
Research claiming remote work boosts productivity is being questioned. More data shows declines in collaboration, mentoring, and motivation.
Office occupancy remains below 50% in many downtowns. The longer this drags on, the more it strains property valuations and CMBS markets.
Some office-to-residential conversions offer hope, but the scale is still too small to offset the systemic risks to cities and banks.

forbes.com

Relevant topic timeline:

8/24/2023

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