Working from home is likely here to stay and commercial landlords are not collecting rent on the reduced oﬃce space retained by their tenants. The eviction moratorium is slowly destroying these owners, eventually leading to increased defaults of commercial loans. What will happen once the short -term forbearance period expires? Vacancies will rise and the sharks will circle the distressed real estate market as they did in the ’80s and ’90s. Unfortunately, the pain will not stop there. The lack of real estate taxes collected will likely bleed the city’s budgets. Delinquency rates will continue to soar, and values will plummet as this non-virtuous circle continues to spin. Private lenders and BDCs should fare well in this type of environment, along with warehouses, data centers, and self-storage.
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