Before any certainty emerges about the level to which office workers will return to their desks, billions of dollars in bets are being made on that happening.

Commercial mortgage-backed securities tied to single office properties have brought in nearly $4B so far this year, making up a third of all single-asset CMBS investment in 2021, Bloomberg reports. The vast majority of those loans are tied to office buildings in urban cores like Manhattan, Philadelphia, Dallas, Houston and Los Angeles.

The Durst Organization raised $1.1B by issuing new CMBS for two office buildings in Midtown Manhattan: 1133 Sixth Ave. and 114 West 47th St., Bloomberg reports. The offerings had enough competition that risk premiums were narrowed, despite the lack of any increased return to offices in the city. Office occupancy averaged 13.5% in New York for the week ending April 7, according to card swipe data from Kastle Systems.

Even the most recent estimates about workers' return expect a significant drop-off, with a Deutsche Bank AG report released on Wednesday projecting a permanent decline in office occupancy anywhere from 10% to 31%, Bloomberg reports. In March, a Fitch Ratings stress test found that a 10% occupancy drop would lead to lower ratings for all but 4.4% of office-backed CMBS loans.

What may be driving the demand for office CMBS, rather than optimism about the future of office work, is a simple bet on yield, as CMBS loans often have floating rates and the interest rate environment is on a meaningful upswing for the first time in years.

Though CMBS loans backed by hotels and retail properties remain at the biggest risk for default, hundreds of billions of dollars have been raised to snap up distressed assets across commercial real estate classes. Continued interest in refinancing might be setting such investors up for disappointment.