Landlords With $1.2 Trillion of Debt Face Rising Default Risks
- Newmark sees defaults mounting for overleveraged owners
- Offices account for biggest share of potentially troubled debt
An empty office building in San Francisco.
Photographer: David Paul Morris/BloombergThis article is for subscribers only.
About $1.2 trillion of debt on US commercial real estate is “potentially troubled” because it’s highly leveraged and property values are falling, according to Newmark Group Inc.
Offices are the biggest near-term problem, accounting for more than half of the $626 billion of at-risk debt that’s set to mature by the end of 2025, the brokerage estimates. Office values have tumbled 31% from a peak in March 2022, when the Federal Reserve started raising interest rates, according to property analytics firm Green Street.