Commercial Property Market Dichotomy

One headline yesterday in Bisnow read “Commercial Property Values, Sales Volume Break Records as Recovery Gives Way To Expansion”, while  on the same day in the San Francisco Business Times the headline read “Analysis: High-profile office towers face foreclosure warnings as occupancy slips, debts come due”. What is happening is overall commercial real estate is setting record sales volumes. “The $193 Billion in commercial sales in 2021 Q3 alone was 19% more than the same period in 2019….The new valuation record was set despite shopping malls, suburban office buildings and hotels declining in value.”  Industrial and self-storage have gone up 40% since the pandemic began. On the other side of this coin, nationwide there are 91 major office properties or portfolios currently watch-listed, in special servicing or delinquent, as of this month, with New York and Houston having the bulk of these.  A rising tide does not necessarily float all boats…