With Commercial Real Estate Still Challenging, Lenders Offload Troubled Loans at a Loss

While leasing activity and vacancy trends suggest the U.S. commercial real estate market is stabilizing, office values are still well below post-pandemic peaks, recent reports show.

As owners scramble to make payments on under-occupied office buildings, many lenders are reluctant to foreclose to avoid the headache of taking ownership and reselling the properties, according to David Marino, cofounder of Hughes Marino, a San Diego-based corporate real estate advisory firm.