Milstein Real Estate In the News

The COVID-19 pandemic forced Americans to change how they live and work, with ripple effects felt across the economy. More than one third of households report working from home more frequently now than they did before the pandemic, and workers go to the office about 3.5 days a week, a 30 percent reduction from pre-pandemic norms. The changes are squeezing the commercial real estate market, which is dominated by office buildings but also includes hospitality and healthcare facilities.

"Now the economics of office buildings is much more challenging," said Tomasz Piskorski, a professor of real estate finance at Columbia Business School. "Stock prices of public REITs tell us the value of office buildings is down by about third since 2020."

US commercial real estate has been hit by the surge in interest rates and a pullback in lending from regional banks. Scott Rechler, chairman and CEO of real estate investment firm RXR, and Stijn Van Nieuwerburgh, professor of real estate and finance at Columbia Business School, break down the risks in commercial real estate.

According to Columbia economics professor Stijn Van Nieuwerburgh, cities across the country could be heading for an "urban doom loop" that starts with vacant office spaces and spreads through downtowns. Later, Rachel Seigel joins The Post’s Teo Armus in Northern Virginia to experience a place that is creatively using vacant office space to escape the doom loop fate.