To: Grommit who wrote (73210 ) 7/29/2023 9:23:37 AM From: E_K_S Read Replies (1) | Respond to Probably still early to be loading up on Office Space REITs but those w/ low debt, a diversified portfolio of Industrial, office, warehouse could be a good time to nibble at bargains. CRE Troubles: US Office Space Set To Contract For First Time The US has nearly 1 billion square feet of empty office space , according to commercial real estate services company JLL. Things could worsen in the CRE market (mainly office) in the coming quarters due to the Federal Reserve's 16 months of aggressive interest rate hikes. This will continue to pressure property owners who have built their real estate empires on a mountain of debt, potentially triggering a wave of delinquencies and defaults due to high borrowing costs. All this is happening when the office sector is already struggling with reduced demand due to the proliferation of remote work, as well as some companies fleeing progressive metro areas because of soaring violent crime. The latest sign the office sector has not hit bottom and values unlikely to return to pre-pandemic peaks this decade is the total amount of US office space is set to decline for the first time in history Bloomberg , citing new data from JLL. Across the nation, underperforming CRE office towers and buildings will be sold or reassessed at massive discounts. Many will be demolished, and some will be converted, as the 'Great CRE Office Reset' is underway. Let's remember there's a multi-trillion-dollar CRE debt maturity wall over the next five years, according to Morgan Stanley.
