Office Real Estate Sector Faces Mounting Trouble: Lack of Liquidity Impedes Loan Availability
The office real estate sector is facing significant challenges due to the shift towards remote work and a lack of liquidity in the marketplace. Office owners are uncertain if demand will return, leading to a "reset in value" and a focus on better buildings with amenities. Keystone, a commercial real estate firm, has been refinancing and exploring office to multifamily conversions to adapt to the changing market. However, affordable housing remains a challenge due to high construction costs, borrowing costs, and investor priorities. Mixed-use zoning and location play a crucial role in successful conversions, but zoning approval can be time-consuming. Despite the difficulties, Keystone has managed to work with lenders and navigate the current market conditions.