Commercial real estate has experienced its share of busts in recent decades, the Wall Street Journal reported Monday, adding, “This one is different.”

Landlords are contending simultaneously with a cyclical market downturn and with secular changes in the way people work, live and shop, the WSJ reported. The sudden surge in interest rates caused property values to fall, while the rise of remote work and e-commerce are reducing demand for office and retail space. 

Investors and economists say these two forces haven’t converged on this scale since the 1970s, when a recession followed surging oil prices and a stock-market rout while new technologies enabled jobs to move out of major cities. This time, the pandemic is largely responsible for accelerating the commercial property upheaval, according to the WSJ.

“It is unknown how bad the commercial property downturn will get,” reported the WSJ. “Some analysts say it may well end up less severe than the previous two downturns, in the early 1990s and after the 2008 financial crisis, especially if the U.S. economy avoids a deep recession and interest rates start to come down quickly.

“But the deeper problems facing office and certain retail landlords mean building values are less likely to rebound to new highs the way they did after those previous meltdowns.”

That’s bad news for economic growth and also for the banks, pension funds and asset managers that both lend on and own commercial properties. “You literally have trillions of dollars of investment that are suddenly just massively impaired,” Dan Zwirn, CEO of Arena Investors, a New York-based asset manager and real-estate investor, told the WSJ.