24 August 2023
Offices present a significant financial challenge, contributing to over half of the $626 billion of vulnerable debt due by 2025. Since the Federal Reserve began increasing interest rates in March 2022, office values have plummeted by 31%. The decreasing property values and escalating refinancing costs due to higher interest rates are raising alarms about potential defaults. Prominent investors, including Blackstone Inc., Brookfield Corp., and Goldman Sachs Group Inc., have already defaulted or surrendered offices. Banks hold the majority of this at-risk debt, with $303 billion of these precarious loans set to mature by 2025.