Commercial Property

Analysis: Why empty office space is set to bury small US banks

There is growing concern that the next economic shock in the US will be caused by the growing level of vacancy in commercial real estate

The US is heading towards the eye of a perfect storm of high interest rates, plummeting commercial property prices and a glut of vacant office space that’s to set increase

Earlier this month, Jerome Powell, chairman of the US Federal Reserve, attempted to reassure fretful Americans that the gathering storm clouds on the commercial real estate horizon were signs of a prolonged squall rather than a Category 4 fiscal storm.

“It feels like a problem we’ll be working on for years,” he told CBS’s 60 Minutes, adding that while America’s burgeoning office vacancy crisis is “a sizable problem”, it’s a “manageable one”, and any financial ...