Office Property Meltdown Is Starting to Surface at Regional Banks
An empty office space in a building in San Francisco, California.
Photographer: David Paul Morris/BloombergThis article is for subscribers only.
Slumping office property values are rippling through US banks, with smaller lenders in particular ramping up the use of loan modifications in their commercial real estate books.
The typical bank with less than $100 billion of of assets modified 0.32% of its CRE loans in the first nine months of the year, a Moody’s Ratings report found. That’s a big increase from the first half of 2024, when it was just about 0.1%.