Party’s over: Rising interest rates crash CRE’s Covid recovery

In early December, Andrew Chung’s Innovo Property Group wired a deposit and penned a contract to buy a 30-story, HSBC-anchored office tower overlooking Bryant Park for $855 million. As Chung worked to close the deal at 452 Fifth Avenue, which would elevate him from a scrappy industrial builder to a Midtown office landlord, the Federal Reserve signaled it would raise interest rates to combat inflation. By May, the SOFR rate — a broad estimate of