The Evolving Priorities of Commercial Real Estate Portfolio Owners and Managers

The commercial real estate industry is facing an unprecedented series of challenges that center around a shift to Work-From-Home (WFH) and Hybrid strategies. Corporate occupiers have instituted WFH and Hybrid schedules to hire talent regardless of where they live, to retain their best employees, and to save money. These series of challenges are compounded by the sky-high interest rates which make refinancing underwater assets and buying/selling new properties (a key component of the primary commercial real estate business model) incredibly difficult, and oftentimes impossible. Some markets across the country are showing signs of improvement, and trophy properties (especially newly constructed ultra-premium assets) continue to attract blue chip firms, but the overwhelming majority of the industry is in survival mode. Real estate is cyclical and downturns are nothing new, but the epic collapse which we are witnessing is something that most people (myself included) never expected to see in their lifetimes. Most downturns are the result of macro-economic changes that always eventually reverse course, and at some point, interest rates will come down to what is categorized as “normal”, b...