CCP Commercial Office Digest

Commercial Office Digest

Callahan Capital Partners is a real estate private equity firm focused exclusively on the origination, acquisition and management of high quality office assets throughout the United States.

“Given the cyclical nature of the real estate business, the value of assets like these will recover in the future when interest rates normalize and corporate economic conditions improve”

While some landlords have handed back the keys to office buildings that reach their debt maturity dates, Boston Properties has made a series of investments and loan modifications that signal it is looking to hold on to its assets for the long term. Read more here.

“Over the past year, we’re finally seeing companies have a vision of what they want to accomplish in their office space, and they’re putting those plans into action.”

Coming out of the pandemic, companies are finally starting to see longer term stability in how office space is being used. Fortune discusses updated trends in office utilization, including the fact that 88% of companies now mandate in-office work. Read more here.

“The clearing of this kind of inventory is part of the market finding a bottom.”

The impending sale of Signature Bank’s $33B commercial loan book is likely to be a potential game changer for price discovery in New York, resetting property values. WSJ reports here. 

“There are going to be a lot of heads that go through the windshield as that business comes to a screeching stop.”

As WeWork works through the bankruptcy process, what happens next could cause a lot of collateral damage to landlords who were once eager to rent to WeWork. Read more here.

Charts We are Talking About

The chart below from Moody’s Analytics shows upcoming CMBS maturities of all office properties with a fully extended maturity date between 10/1/2023 and 9/30/2024. About 75% of loans maturing in the next 12 months are facing significant lease rollover or are already REO.

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