According to a report by the McKinsey Global Institute, there is a forecast that office property values in nine major U.S. cities could potentially decrease by $800 billion over the next seven years. The prediction is based on a "moderate" scenario, in which the demand for office space in 2030 is expected to be 13% lower than it was in 2019.

The impact of this trend has been particularly significant in San Francisco, where the office market has been hit the hardest. The city has already experienced several major loan defaults this year. However, despite challenges in the Golden State, Wells Fargo, a major bank, has managed to achieve successful loan workouts in its portfolio.

Wells Fargo's outstanding office commercial real estate (CRE) loans amount to $33.1 billion, and nearly a third of this sum, approximately $9.9 billion, has been extended to borrowers in California, making it the largest recipient of these loans among the states. Following California, New York and Texas have also faced challenges in the commercial real estate sector this year.