Office buildings are losing their shine among real estate investment trusts, who are finding it difficult to sell off such assets.
Real estate investment trusts are trying to “aggressively” off-load their office space as remote work continues to pummel the market as well as their bottom lines.
It’s a situation experts say brings more turmoil to Toronto’s troubled office sector, and may lead to more building conversions, full-scale demolitions and declining valuations.
REITs that are heavily invested in office space have taken a financial hit as the sector continues to feel the effects of high vacancy rates. Commercial real estate firm CBRE shows Toronto’s downtown office vacancy rate climbed to 18 per cent in the first quarter of 2024 and valuations have fallen dramatically.
REITs are companies that own or finance a range of income-producing real estate properties and many are publicly traded on a stock exchange. Recently, Toronto-based Allied Properties’ REIT had their debt downgraded to junk by Moody’s, a credit rating and risk analysis company, meaning the REIT’s bonds may be a risky bet as the company has a higher likelihood of failing to repay their debts.
This story is from the June 28, 2024 edition of Toronto Star.
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This story is from the June 28, 2024 edition of Toronto Star.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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