The final day of the CRE Finance Council (CREFC) featured three panel discussions on distressed office, alternative housing options, and the growing capital needs for data centers.
From Vacancy to Value: Repositioning, Financing Opportunities in Distressed Office
The panel opened by framing the scale of distress in the U.S. office market despite improving sentiment in select gateway cities. CMBS office delinquency rates have climbed to roughly 16%, refinancing success is only about 50%, and an estimated $100 billion of distressed office remains unresolved across CMBS and regional banks. Although headlines about leasing often highlight Manhattan and a handful of Sunbelt markets, panelists emphasized that distress is uneven and highly market- and asset-specific, with single-asset single borrower (SASB) loans and older Class B/C assets under the greatest pressure.
Across markets, recovery is being driven by bifurcation rather than broad-based improvement. Prime submarkets such as…