Commercial real estate faces rising distress as refinancing at higher rates hits office and multi-family sectors hard.

Why this matters

Office continues to trade in two distinct markets: trophy assets in walkable submarkets that are leasing at or near record rents, and commodity Class B and C buildings where the basis is still resetting. Underwriting on the latter has moved toward replacement-cost-minus, with credit underwriting now leaning on tenant covenant and remaining lease term rather than mark-to-market expectations. For LP-positioned capital, the read-through is that the bifurcation is now a structural feature of the sector, not a cycle to wait out.

Editorial analysis · Real Estate Trail Editorial

On the RET wire

• Disclosed office deal value tracked in November 2026: $4B across 13 reported transactions. All Office coverage →

Computed from Real Estate Trail’s own tracked coverage

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