C
ommercial real‑estate values in the U.S. have slipped roughly 18 % from 2022 highs, a trend that mirrors the Federal Reserve’s rate‑raising cycle and the tightening of credit. The decline has pushed vacancy rates higher and made refinancing more difficult.

    Office space is the most visible casualty: the second‑quarter 2025 vacancy rate hit 20.7 %, the highest on record, while delinquency on office‑backed CMBS reached a new peak of 14.26 %. These figures signal mounting pressure on owners who cannot lease or refinance their buildings.

    The slump is not limited to offices. MSCI Real Capital Analytics reports a 23 % year‑over‑year rise in delinquencies across all commercial properties as of March, and the FDIC has flagged rising past‑due and non‑accrual loans in the multifamily sector, indicating that many loans are unlikely to be repaid under current terms.

    Harvard Business Review warned in mid‑2024 that more than $1 trillion of loans will mature in the next two years, potentially sparking a broader financial crisis if numerous small and midsize banks fail simultaneously. The Conference Board confirms that many regional and community banks hold commercial‑real‑estate portfolios that exceed their risk‑based capital limits, leaving them highly vulnerable. Worldwide Steel Buildings, a maker of steel building kits, has described the market as “in crisis” mode, citing Moody’s Analytics data on soaring office vacancies.