Photo by Tierra Mallorca on Unsplash

In the second quarter of 2023, the volume of distressed commercial real estate grew by $8 billion–the largest quarterly increase since the second quarter of 2020.

The WSJ reports that Wall Street firms are raising new funds to acquire office buildings, apartments and other troubled commercial real estate at a fraction of the price investors paid a few years ago. See, Wall Street Is Ready to Scoop Up Commercial Real Estate on the
Cheap:

“Commercial-property values already have fallen about 10 to 15 percentage points from their peaks in the third quarter last year, and might fall a total of 20 to 25 percentage points.”

Converting commercial into residential space will be part of the rebalancing process needed. Lower prices are part of the equation.

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