Office REIT Stock Prices Drop as Return-to-Work Rate Slows

Share prices for some of the largest office landlords have dropped to near historic lows, according to a report by The Wall Street Journal. This reflects a sluggish return-to-work rate and an increase in investors betting that these stocks will continue declining.
SL Green’s share price closed at $22.54 on Friday, which is only slightly above its 1997 initial public offering (IPO) price and far below its post-global financial crisis peak of more than $140 in 2015. Vornado Realty Trust – owner of marquee office buildings located in San Francisco, Chicago and New York – closed at $13.13 per share on Friday; this is compared to the high of nearly $67 recorded as recently as 2020.
Both Vornado’s and SL Green’s shares are down over 30% year-to date while the broader stock market has seen gains during this same period . In addition to stalling growth within occupancy rates , higher interest rates also present a challenge for many office owners who have billions worth of floating or low interest rate mortgages that must be refinanced likely with much higher rates .  Asset manager Cohen & Steers’ real estate portfolio manager Ji Zhang told The Wall Street Journal “Until we see some resolution to those [balance sheet] problems it’s hard become more positive about the sector.”