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Exploring Debt Restructuring Options for CRE Owners

By Michael Criscito
March 01, 2024

In the dynamic landscape of real estate, commercial real estate owners often find themselves facing financial challenges that necessitate a strategic approach to debt management. In such cases, exploring debt restructuring options becomes a crucial consideration. Property owners looking to navigate their way through financial uncertainties and emerge with a strengthened financial position have numerous options available.

Common Reasons for Debt Restructuring

Prevailing market conditions have created an environment ripe for more potential defaults in commercial real estate and an increased number of distressed assets. While the post-pandemic slow return to the office has led to reduced demand for office space and decreased valuations of those properties, other challenges are motivating owners to restructure their debt as well. These include rising interest rates and tighter liquidity, the decline in brick-and-mortar retail that is plaguing malls, and the more complex financing scenarios for distressed properties.

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