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Commerical Real Estate Crisis Looms
Is a commercial real estate crisis on the horizon?
Roughly $1.5 trillion in commercial real estate debt is due by the end of 2025, and steeper borrowing costs, coupled with tighter credit conditions and a decline in property values, have increased the risk of default.
Regional banks currently at the center of the financial meltdown hold about 80% of commercial real estate debt. In addition, this is problematic for building operators as they continue to experience decreased tenant occupancy rates following the shift to remote work and as pre-pandemic leases expire.