Billions of dollars in office building loans are set to come due, potentially impacting the US economy as interest rates have risen.
Owners face challenges in refinancing due to increased rates and reduced office space revenue from pandemic-related downsizing.
Economists predict a significant portion of loans will be difficult to repay or refinance, potentially leading to defaults.
The Federal Reserve’s expected interest rate cuts may provide some relief, but big banks are already preparing to offload debts at a discount, indicating a lack of faith in the commercial real estate market.
The situation could lead to a recession and stifle construction and development in major US cities.
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