Office Building Owners Snubbed by Life Insurance Lenders

Many insurance firms have become skittish about rising vacancy rates and falling rents in the office market. Photo: Eric Thayer/Bloomberg News
Life insurance companies, until recently a reliable source of capital for commercial property developers, are turning their backs on office building owners as tens of billions of dollars in office loans come due this year.
Many of these insurers have slowed or stopped making office loans, executives and analysts say, interrupting the sector’s decadelong expansion into commercial property lending. Insurance firms have become skittish about rising vacancy rates and falling rents, reflecting the growing popularity of remote work and return-to-office rates that are still around half the levels workplaces enjoyed prepandemic.