Companies seek new office buildings, shun ‘aging’ ones!

By | January 25, 2022

Companies seek new office buildings, shun ‘aging’ ones!

This has led to an uptick in the default rate for CMBS backed by ‘buildings with large vacancies and insufficient cash flow to pay back their debt’!

The default rate in December hit 2.53%, up from 1.81% in November.

Compounding the problem is the fact that companies ‘are now able to afford the higher-end space by shrinking their leased footprint because of the remote work shift and as the owners of newer buildings offer record breaking cash and rent incentives to sweeten their offers.’

Read more in the Bisnow article, ‘What Do We Do Here?’: Distress Signals Are Rising In Major Office Markets’, here https://www.bisnow.com/national/news/capital-markets/office-sector-could-see-more-distressed-loans-as-tenants-flee-older-buildings-111539.

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