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Principal <a href="https://www.goldbergkohn.com/people/kevan-ventura/">Kevan Ventura</a> is quoted in "Commercial Real Estate Bargain Hunters Are Snagging Offices for ‘Extreme’ Discounts Up to 70%," published June 13, 2024, in <a href="https://fortune.com/section/finance/">Fortune's</a> CFO Daily newsletter and on Yahoo!finance.

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It’s no secret that commercial real estate has been struggling the past few years, writes the article editor, Sydney Lake. She reports that the sector is still reeling from the pandemic, which pushed more professionals to work from home and consumers to shop and dine at home. As a result, office vacancy rates reached a 30-year high around 18% in 2023, and companies both large and small majorly shed space to adjust to new remote- and hybrid-working norms. Some even terminated their leases early.

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Now, commercial real estate bargain hunters are snagging space for steep discounts up to 70% off, according to several reports from commercial real estate information company CoStar. In the current state, commercial real estate is in trouble; most of these steep discounts have been seen in the office sector. The article lists several well-known properties across the country as examples.

The steep discounts offered on commercial properties is just the latest sign of a struggling sector. Another one of the most damning figures that illustrates the doom headed for commercial real estate is the total value of mortgages that will mature in 2024. By Mortgage Bankers Association projections, $929 billion of the $4.7 trillion outstanding commercial mortgages held by lenders and investors will come due this year.

While many commercial properties have lost value during the past few years, not all are being offered at steep discounts. Moody’s looked at various price indices that measure changes on repeat sales of the same properties over time and found that office values have come down about 20% to 30% since their 2021 peak. However, other measures imply a 30% to 40% discount, Moody’s head of commercial real estate economic analysis, Kevin Fagan, tells Fortune.

Either way, it’s undeniable that many commercial property owners are having a tough time keeping their buildings occupied.

“Building owners face significant headwinds attracting and retaining tenants, especially in the office category,” says <a href="https://www.goldbergkohn.com/people/kevan-ventura/">Kevan</a>. “Simply put, reduced tenant demand contributes to reduced rental income and reduced value. Maintaining occupancy is critical to financial viability.”

<a href="https://finance.yahoo.com/news/commercial-real-estate-bargain-hunters-161229081.html?guccounter=1">CLICK HERE</a> to read the full article.

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