Share prices for some of the largest office landlords have dropped to near historic lows, according to The Wall Street Journal. Investors are betting that these stocks will keep falling due to a sluggish return-to-office rate and higher interest rates which present a challenge. SL Green’s share price closed at $22.54 on Friday, barely above its 1997 initial-public-offering price and far below its post-global financial crisis peak of more than $140 in 2015; Vornado Realty Trust shares closed at $13.13 on Friday compared with their 2020 high of $67 per share – both down more than 30% year over year while the broader stock market is up overall.
Many office owners have billions of dollars in floating and low interest rate mortgages that need refinancing likely at much higher rates, reported The WSJ . “Until we see resolution to those balance sheet problems it’s hard to become positive about the sector,” said Ji Zhang, real estate portfolio manager for asset manager Cohen & Steers as quoted by The WSJ .
