XPost: ca.politics, talk.politics.guns, talk.politics.misc   
   XPost: alt.society.liberalism, alt.politics.economics, sac.politics   
   From: remailer@domain.invalid   
      
   LOS ANGELES (AP) — The failure of several large lenders earlier this   
   year and the banking turmoil that followed have fueled worries for   
   owners of office space such as Boston Properties and Vornado Realty   
   Trust.   
      
   The sharp runup in interest rates by the Federal Reserve over the   
   past year and a slowing economy had already set the stage for office   
   building owners and other commercial real estate companies to have a   
   harder time refinance their debt. Then the bank failures, starting   
   with the mid-March collapse of Silicon Valley Bank, rattled the   
   banking industry, which has since tightened its lending standards.   
      
   Unlike apartments, industrial buildings and other commercial   
   property sectors, office space has been plagued by rising vacancies   
   since the pandemic popularized working from home.   
      
   Falling demand for office space could lead to declining property   
   values, which also makes it harder for owners to refinance. That   
   could drive up loan losses for banks and further limit lending in   
   healthier areas of the commercial real estate market.   
      
   “That’s one of the fears or risks here, that if office really gets   
   hit so hard, it can end up bleeding its way into the other sectors,”   
   said Thomas LaSalvia, director of economic research at Moody’s   
   Analytics.   
      
   In the first quarter, the vacancy rate for office properties across   
   the nation's 50 biggest metropolitan areas was 19.1%, the highest   
   rate since 1991, according to Moody's Analytics.   
      
   It’s common for commercial real estate owners to refinance loans on   
   their properties every few years, as it helps free up cash to make   
   improvements or expand their portfolio. As the value of a commercial   
   property increases, usually via strong occupancy rates and rising   
   rents that generate income for the owner, the terms they’ll get to   
   refinance the loan on the property tend to become more favorable.   
      
   However, the reverse is also true. For example, as vacancies rise,   
   less rental income comes in, and that could make the property a   
   riskier bet for a lender, who could then charge more to refinance or   
   even refuse to do so altogether.   
      
   https://news.yahoo.com/office-landlords-squeezed-falling-occupancy-   
   142320396.html   
      
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