NEW YORK (Dow Jones)–Commercial real estate owners are walking away from properties that have become untenable as investments, just as homeowners have walked away from houses they can no longer afford to pay off or sell.
The latest commercial property owner to do this is Vornado Realty Trust (VNO), the $13 billion real estate investment trust, which warned last week that it would walk away from two loans totaling $235 million.
The trend is likely to escalate in coming months as more loans mature and refinancing remains difficult and costly. As with residential properties, there is less incentive for owners to hold on to properties when the buildings are worth less than what is owed on their mortgages.
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