Part 1: Keeping a Close Eye on the Commercial Real Estate Market

Jul 24, 2023 | Macro Insights, No Bull Economics

Commercial Real Estate Post Banner

The banking crisis is over, or is it? We suggest that it is a good idea to closely monitor the condition of the banks’ commercial real estate loan portfolios which have expanded to $2.9 trillion currently from $1 trillion in 2004. There are important challenges to this asset class for us to consider…


  • Given higher post-covid telecommuting and increasing inner-city crimes, office occupancy rates are down and the cost of capital to fund transactions has increased significantly, pressuring commercial office prices and making it difficult to appraise collateral value.
  • The Green Street Commercial Property Price Index, which tracks the pricing of institutional-quality commercial real estate, is down -16% from its March 2022 peak through the end of June 2023.
  • Notably, the office tower at One South Street in downtown Baltimore made news after it recently sold for $24MM, representing a -64% decline from its $66MM sale price 8 years ago.
  • With fewer people commuting to the cities, retail demand in the urban metros is also down, pressuring retail commercial real estate values as well.  
  • In our next post we discuss how banking regulators are preparing to deal with this challenge.
Commerical Real Estate Prices and Commercial Real Estate Loans Graph

Marketing Consumer Research Weekly Banner

Nobull consumer research weekly

No Bull Economics

Get Corporate & Market Insights in your inbox