I’ve been skeptical of commercial real estate for years, and one of my central arguments has been relatively simple: much of the industry spent the better part of a decade operating under the assumption that artificially cheap money, ever-rising property valuations, and perpetually available financing were permanent features of the economic landscape.

And…fucking spoiler alert…they weren’t. In fact, just days ago, on October 29, I wrote a piece called The Commercial Real Estate Crisis Is Far From Over, arguing that the disappearance of commercial real estate from the financial headlines didn’t mean the losses had disappeared from the balance sheets.

I highlighted research from Trepp showing that 75% of Class A office loans in a sample of maturing commercial mortgage-backed securities would require additional equity to refinance, compared with 61% of Class B and C properties.

And now, just days later, we have another spectacular example of exactly what I’ve been talking about. According to a new report from The Wall Street Journal, Brookfield, one of the largest real estate investment firms in the world, is walking away from a roughly $600 million luxury apartment tower in downtown Los Angeles, less than four years after the building opened.

In a zero rate environment, the building would likely be a success at this occupancy rate. But today…and just think about the absurdity of this…a nearly brand-new, 95%-occupied luxury residential skyscraper, developed at a reported cost of $600 million, has become a property its owner would rather abandon than refinance..

https://www.zerohedge.com/news/2026-11-03/even-more-proof-commercial-real-estate-cracking