Office Valuations Plummet As Fed Raises Rates To Fight Inflation

Commercial real estate (CRE), specifically office spaces, are experiencing a significant downturn due to rising Federal Reserve rates and inflation. The NCREIF Office Property data reveals a steady decline in office value since Q2 2022. A report from Trepp highlights a severe value loss in the past decade, with newer buildings losing 52% of their value. Coupled with $528.7 billion of commercial mortgages maturing this year and a decrease in real gross domestic income, the outlook for the US economy and CRE market is troubling.