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May 26, 2023

Office landlords squeezed by falling occupancy rates, refinancing issues

  • 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.
    • By ALEX VEIGA
    AP Business Writer

    LOS ANGELES — 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 refinancing 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.


     
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