# U.S. Office Losses Reach Distressed Sales as Loan Extensions Fail

By Enna Lee

Canonical URL: https://www.tokenpost.com/news/investing/24453
Published: 2026-09-26T16:24:23.000Z
Updated: 2026-09-26T16:24:23.000Z
Section: Investing

> Maturing commercial mortgage-backed securities loans and falling property values are pushing office owners toward defaults and discounted transactions.

U.S. office owners are realizing losses through distressed property sales as maturing debt, lower valuations and denied loan extensions expose the market’s financial strain.

About $64 billion in office commercial mortgage-backed securities (CMBS) loans come due this year and next. Nearly $40 billion is already delinquent, in default or identified as potentially troubled.

Chicago’s Aon Center illustrates the pressure. The 83-story building sold for $712 million in 2015 and was later tied to $536 million in CMBS debt. Its latest appraisal valued the property at $195 million, roughly 73% below its 2015 purchase price.

The debt matured in July, and the owner could not repay it. The owner sought a three-year extension, but the request was “unequivocally denied.”

Office conditions vary sharply by market. Downtown vacancy in Chicago is about 27%, while Denver’s rate has reached 39%. New York has remained more resilient, while San Francisco has received new demand from the artificial intelligence boom.

The divide also extends across individual cities. Tenants are favoring newer buildings with stronger locations and modern amenities, leaving older Class B properties with fewer prospective occupants.

Denver’s Republic Plaza has lost roughly 80% of its value since Brookfield financed it in 2012. Chicago’s Citadel Center sold for $137 million, approximately 76% below its 2006 sale price.

Investors are buying properties and debt at sharply reduced prices. Chicago’s 175 West Jackson Boulevard sold for $41 million, nearly 90% below its pre-Covid sale price. Elsewhere in the city, investors bought debt tied to another major tower for about $100 million, roughly 76% below the building’s previous purchase price.

The repricing is turning losses that once existed mainly on paper into realized losses as loans mature and extensions become harder to secure.

“One of the scariest headlines is that office CMBS delinquencies are higher than after 2008,” Dan McNamara of Polpo Capital said. “And it’s going to go higher as we face more maturities.”