FTI Experts’ Hub: Expect More Office Distress in H2 2023

Rob Raymond, Managing Director, FTI Consulting. Image courtesy of FTI Consulting

The office sector as we knew it before 2020 is dead—this perception is very common in commercial real estate, although there still are some voices that believe it is just a myth. For Rob Raymond, managing director at FTI Consulting, the myth is more of a reality than we think, considering we’re more than two years post-pandemic and the total return to the office hasn’t happened. As a specialist working alongside clients with significant office portfolios, Raymond thinks we’re going to see more distress in the office sector in the second half of the year.

In a podcast interview with Commercial Property Executive Senior Editor Laura Calugar, Raymond painted a fairly grim picture for office real estate for the rest of 2023, but he also talked about the silver linings.

“I think this isn’t such a sudden crash as what happened in 2008-2009,” he said. “If capital markets really do dry up, it’s been a slow drying and we’re going to be a little bit more prepared for it this time.”

Tune in to find out more about Raymond’s outlook for the office sector! Here’s a list of the topics discussed in this episode of FTI Experts’ Hub, CPE‘s quarterly podcast series with FTI Consulting specialists:

• Is the death of the office just a myth? (0:42)
• The office landscape today vs. 2009 (2:57)
• Will office values ever recover? (3:45)
• The flexible approach (5:04)
• Taking advantage of employees’ reluctance to return to the office (6:39)
• Is the bulk of problems in Class B&C office? (8:40)
• What delinquencies and loan defaults mean for the sector (09:55)
• Expectations for lenders and borrowers in the second half of the year (10:51)
• Prepare for more office distress (12:00)
• Will the conversions trend pick up steam? (13:39)
• How cities are recovering from the pandemic at different rates (16:28)
• Are suburban offices strengthening their comeback? (18:34)
• Cities or regions expected to outperform going forward (20:41)

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