An ABI Committee Newsletter
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| Vol 20, Num 2 | November, 2025
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by
Katharine Battaia Clark, Thompson Coburn (Dallas)
Patrick J. Potter, Pillsbury (Washington, D.C.)
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The more things stay the same, the more they stay the same. Despite the apparent annual event of predicting that various asset classes have “seen the worst of it” and “will rebound this year,” by and large the opposite has occurred in 2025 so far. From domestic and international perspectives, real estate financial distress is not going anywhere anytime soon.
In one of this month’s ABI Real Estate Committee newsletters, Craig Barbarosh and Jake Henning remind us that roughly $400 billion of office loans will mature in the next three years, most suffering from the inability to service debt and otherwise obtain refinancing. During his Jan. 8, 2025, ABI webinar presentation, Brandon Svec suggested a retail rebound in 2025 because retailers had already largely exhausted their filings, yet this year we continue to see both new and “chapter 22” filings in
the space. Hotels, which continue to suffer from monthly foreclosures and bankruptcy filings in 2025, endure occupancy rates that are “flat” (if not down) year-over-year, and RevPAR that is outpaced by inflation. Nonresidential construction spending is down for the sixth time in seven months, and Goldman Sachs says that housing remains the weakest part of the economy.
The U.S. is not alone, as European, Asian and other markets are suffering equally in this area (if not more). It appears that there is no industry on the globe that is suffering from a greater magnitude of financial distress and insolvency than real estate. For service providers in the space, expect to continue to be “drinking from the proverbial fire hose” for the foreseeable future.
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by
Britney Baker, King & Spalding LLP (Atlanta)
Christian Adams, King & Spalding LLP (Atlanta)
Bennett Stover, King & Spalding LLP (Atlanta)
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Insolvency professionals practicing in the real estate industry are nearly certain to encounter a receivership, whether on behalf of a property owner, manager, lessee, lender or other party. A receiver is an individual charged by a court with taking possession of a piece of property to “receive, collect, care for, and dispose of the property or the fruits of the property.” Thus, the goal of appointing a receiver is to promote the adequate management and preservation of property.
However, differing state and local laws governing the appointment and powers of a receiver have resulted in significant inconsistencies across states and even counties within states. To combat this issue, the Uniform Law Commission (ULC) finalized a model Uniform Commercial Real Estate Receivership Act (UCRERA) in 2015.
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by
Craig A. Barbarosh, CommonWealth Partners LLC (Irvine, Calif.)
C. Jacob Henning, CommonWealth Partners LLC (Irvine, Calif.)
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Commercial real estate’s office sector is currently the “haves” versus the “have-nots.” We project a shortage of space in best-in-class central-business-district (CBD) office assets with the best amenities, while there will continue to be excess supply of lower-quality and suburban office spaces that will need to be repositioned for alternative uses.
Return-to-office policies are accelerating, and employers want to offer premier office environments to entice their employees. National vacancy and sublease availability appear to have peaked, construction starts are at historic lows in the current market, and transaction volume is well below historical levels. Nearly $400 billion of office loans are maturing in the next three years, and most loans face significant funding gaps estimated at $130 billion for office secured loans. As a result, we see
challenging, capital-intensive workouts ahead for most office loans, yet higher demand and pricing with limited supply for best-in-class office assets.
Read Full Article Online →
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ABI’s Real Estate Committee will be hosting a webinar this Thursday, Nov. 6 at 5:00 p.m. ET that will dive into the office space market, presenting the perspectives of a national bank special-assets manager, a CMBS attorney and a transaction professional. The session will take place as a hybrid Zoom webinar/in-person program at the New York City offices of Pillsbury and will conclude with a live Q&A session followed by a reception. CLE is available. Click here to register for the webinar, or here to register for the live event.
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