U.S. commercial real estate braces for defaults as pandemic cuts cash flows

Hotel rooms sit empty. Office buildings have gone dark. Families cook in their kitchens instead of dining out at restaurants and stream movies at home.

The coronavirus pandemic has turned the $4.4 trillion U.S. commercial real estate finance market upside down, even as states start to explore ways to safely reopen parts of the economy after imposing strict lockdowns that cut landlords off from monthly rents.

“We can’t compare it to 9/11. And if you go back to 2008, that was more about overleverage and looser underwriting,” said Ann Hambly, the founder of 1st Service Solutions, a firm that helps commercial property owners navigate loan workouts...