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The Federal Reserve’s interest rate hikes have crimped transactions and pressured landlords — particularly owners of office buildings that were already hit by the rise of remote work. As costs mounted, property valuations tumbled, pushing some investors to walk away from certain buildings instead of continuing to throw good money after bad.
“I think the big challenge right now is, one, the interest rate environment that has brought a huge amount of uncertainty is challenging the investment sales market,” Zegen said in an interview on Bloomberg Television. “That, coupled with a banking crisis that happened about a year ago, still leaves people with PTSD, depositors in particular. Banks traditionally borrowed short and lent long. And that model is broken.”
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