According to Bloomberg’s latest Markets Live Pulse survey, the U.S. office market is facing a potential crash and may continue to decline for at least nine more months. The majority of respondents believe that a severe collapse must occur before any rebound can take place, with many predicting that commercial real estate (CRE) prices won’t reach their lowest point until the second half of 2024 or later.
The Federal Reserve’s aggressive tightening campaign has greatly impacted commercial property values, as reported by Bloomberg. However, lenders looking to reduce their exposure are struggling to find suitable options due to lack of confidence in the market’s stability.
Lea Overby from Barclays Capital explains that holders are hesitant to sell at significant losses and will likely delay sales for extended periods if possible. This sentiment was echoed by other experts in Connect CRE’s recent survey on investor expectations regarding office prices.
