, meaning how much space companies use on a day-to-day basis. He added that construction costs and inflation have driven prices to a point where it might be easier to buy an older building than build a new one and institutional investors have other choices in investments and could be over-allocated in real estate investments currently.
"There's been a lot of discussions lately about what alternative uses are available for some of the Class C offices," he said."I think it's going to depend on the location, but I think you're going to start to see some adaptive-reuse for many of those buildings to the extent the economics make sense."
Moving forward into 2023, Storey said that borrowers are likely going to have to put up more equity for loans for new development or refinancing as loans are going to issue more conservatively across the board. Nationally, the mortgage banking firm reported $4.93 billion of commercial mortgage production in 2022, which neared its record production total of $5.15 billion in 2021. Life insurance companies, regional banks and credit union lenders funded the bulk of Gantry's loan production for 2022. Join the Phoenix Business Journal as we kick off our 2023 Growth Summit series of in-person economic development events that will focus on several key areas of the Valley throughout the year.
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