Commercial property values likely aren't done falling, especially in the office sector, CBRE Group CEO Bob Sulentic said during an event hosted by the Dallas Regional Chamber late last week.

“We thought values may come down 15%, 20%. We now think that may be another 10%,” Sulentic said, according to Fortune.

Office continues to be hit hard as remote work persists. Workers will spend as much as 25% less time in the office than before the pandemic, Sulentic said.

That has pushed demand for office space down. As of the third quarter, the national office vacancy rate was 18.4%, up 20 basis points from the previous quarter and well above the immediate pre-pandemic quarters, when the national vacancy rate hovered around 12%, CBRE reports.

Sulentic's comments echo a sentiment he expressed during CBRE's most recent earnings call in late October.

“There's still a view that values are going to come down some, that privately held assets haven't come into line yet and, you know, maybe another 5% to 10% decline in asset values,” Sulentic said, though he added that he expects the market to align enough that assets will trade again in the second half of 2024.

CBRE Chief Financial Officer Emma Giamartino said during the call that valuation uncertainty has been impacting the company's deals.

“One of the things that's happening right now is we are looking at a number of deals, and we've talked about deals on the larger end of the range that we've typically looked at in the past,” Giamartino said.

“But pricing has become more of a challenge than it was a year ago or even six months ago, similar to what's happening in the real estate market with the gap between buyer and seller valuations remaining high or even increasing as interest rates are increasing.”