Chief financial officer Colin Simpson said the value of the Toronto-based life insurer’s office assets is down dramatically since before the pandemic. High interest rates and the shift to remote work are the culprits, said Simpson. (Bloomberg)

Talking point: North American offices represent about 10 per cent of Manulife’s alternative, long-term assets, down from about 40 per cent a decade ago. White-collar North Americans  have been slower than others to return to the workplace, with U.S. vacancy rates nearly reaching 20 per cent at the end of last year. Simpson told Bloomberg he thinks office property values may have hit their nadir, but he doesn’t expect a quick recovery. “Would we look to increase the exposure at this point in time? Absolutely not,” he said. “Is there a vibrant liquid market we could sell into and realize a lot of value? No.” Canadian pension funds are similarly facing rising losses in real estate, according to a Fitch Ratings report published Tuesday. The funds’ “exceptionally strong liquidity,” however, means they can absorb the losses and avoid forced sales.