"Empty Offices Prompt Landlords to Surrender Keys"

Office landlords, facing the impact of remote work, are resorting to "handing back the keys" by defaulting on mortgages or refusing to refinance office buildings. This tactic allows banks or investors to repossess the buildings, shifting the financial burden onto lenders. Major players in commercial real estate, such as Brookfield and Blackstone, have already defaulted on mortgages, highlighting the challenges in the office market. The pandemic has demonstrated that employees can work effectively from home, leading companies to downsize office space and leaving many office towers unprofitable. Approximately 23% of office space in the US was vacant or available for sublet at the end of November. "Handing back the keys" limits landlords' losses on buildings that have significantly decreased in value.