The repricing of the bond market will drive a 40% decline in the price of America’s office buildings by the end of next year, research firm says

• The rise in bond yields could spark a price crash in the office sector, according to Capital Economics.
• That’s because rising Treasury yields could impact cap rates on office buildings, which lowers prices. 
• Office prices could see a 40% peak-to-trough decline by the end of next year, the firm predicted.

Soaring bond yields will have a hand in pushing the price of America’s office properties down as much as 40% by the end of next year, according to Capital Economics. 

The research firm pointed to the recent surge in Treasury yields, with the yield on the 10-year bond recently hitting 5% for the first time since 2007.