Banks Minimizing Losses on Troubled Office Loans
Banks are abandoning the extend-and-pretend approach for distressed property debt and opting to rip off the Band-Aid instead, as studies forecast a steady decline in office values due to remote work. Banks are now taking the hit they know over a future one they don’t, with some pushing for deeds-in-lieu-of-foreclosure and short sales. However, the secondary market for these loans has been devoid of bidders, as most see office as more trouble than it’s worth.