Europe's office market is facing the toughest conditions since the financial crisis, as rising interest rates and a surge in building costs threaten to choke off its recovery.
According to an analysis by Bank of America, the cost of servicing debt has gone up due to higher interest rates and a tighter financial environment.
It could cause distress for office companies that have too much debt.
Debt servicing costs have gone up due to rising base rates. The real estate analyst at BofA believes that there is more to come.
The cost of borrowing for European real estate companies is only 25% of the interest rate. The credit spread is a measure of how much more a company has to pay to borrow compared with a government.
According to BofA calculations, credit spreads have doubled for UK listed real estate companies and almost tripled for European groups over the past year.
The Bank of England earlier this month delivered the biggest rise in its key interest rate in more than 25 years as it steps up the fight against inflation.
The office market had a good start to the year, but has fallen since. The first quarter of the year in London was 105 per cent above the 10-year average, but in the second quarter it was 27 per cent below.
When buyers have to re-finance their debt, the challenge could increase.
Adam Goldin is the head of the UK business for CC Land, the Chinese developer that owns London's Leadenhall Building.
You don't have the money if you don't have the money. How much capital is there to buy will be found after that.
They point out that the level of leverage in the sector is much lower than it was before the financial crisis and that other investors and buyers will step in once prices fall further.
Mozzi isn't sure. He said that people wouldn't buy something that returns less than they pay for it.
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