Investors may be whistling past the graveyard of CMBS. Certainly, small and regional banks are walking in this graveyard. We are now well past the COVID pandemic economic destruction, but life has changed and fixed assets are still in the process of adjustment. Corporates do not need office space for employees that work from home and will not return to the central business district. Leasing will continue to roll-off, and available space will continue to grow. It is not a matter of price if you just do not need to good. Available rates for every major city are at or above 20%, delinquencies are at 7% and do not seem to be at a peak. Major firms are walking away from buildings and real estate transactions are showing massive discounts. Some is taking the loses and we cannot assume that the problem will fix itself. Rates are unlikely to fall this year by any amount that will positively impact real estate. The slow walk of a crisis is at hand.
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