The embattled commercial real estate market may finally have a few things going its way, according to recent data.
A Moody’s analysis cited that declining transactions have bottomed, with year-on-year sale volumes now positive for the first time in two years. In the second quarter, the four core real-estate sectors notched $64 billion in transactions — marking 9% upside turnaround.
That’s not to say all is bright. The credit rating agency noted persistent weakness in the office space, as last quarter’s vacancy rates hit another record high of 20.1%. However, national office utilization has increased enough to stabilize the market.
Post-COVID norms have been the chief culprit behind office sector strain, as remote work became an entrenched part of US corporate culture. With fewer employees using the office, buildings lost tenants. That left owners with harder-to-pay debt, made worse by high interest rates and tighter bank lending. Defaults have not been uncommon.
And yet, …