Business is booming.

Commercial real estate expected to slip further as market continues to underperform

Koch also pointed out that $1.5 trillion worth of commercial mortgage-backed securities were maturing soon and they needed to be extended.

What is going on with the commercial real estate market?

With the shift to hybrid work, along with rising interest rates and the difficulty in accessing credit following a regional banking crisis, the commercial real estate market had been deeply affected.

According to a report published by the National Association of Realtors regarding the state of the commercial real estate market in July 2023, office space vacancy rates rose 13.5% compared to the same time in the previous year.

The industrial sector of commercial real estate also slowed compared to the previous year. Net absorption was reportedly 40% less than it was in 2022. The industrial vacancy rate was raised to 5.4% and moderated rent growth raised to 7.2%. Despite this, rental costs for industrial spaces continued to rise faster than before the pandemic.

Still, Koch remained optimistic about how there were still a number of good properties that piqued the interest of employers who were trying to get their workers to return to the office.

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