Remote work and high interest rates could cause commercial real estate to drop by 40% in value while $1.5 trillion in debt is due for repayment in 2025, Morgan Stanley analysts said.

Recent bank failures and deposit withdrawals are complicating matters, since small and regional banks are major lenders to the $20 trillion office and retail property sector, the New York Post reports. They are also important buyers of commercial mortgage-backed securities.

“Refinancing risks are front and center,” Morgan Stanley analysts said. “The maturity wall here is front-loaded. So are the associated risks.”

In March alone, the value of commercial real estate properties in the U.S. fell by 15%, according to Green Street data.

Commercial real estate debt will continue piling up to 2025 and beyond, with $550 billion in debt maturities due in 2027, the investment banking analysts said. Regional banks hold as much as 70% of these loans, they add.

“Work from home [has put] fundamentals under pressure at a time when lending is less available than over the last decade,” said Rich Hill, head of real estate strategy at Cohen & Steers, an investment firm specializing in property investments. “Those two factors will lead to a pretty significant decline in valuations.”

Hill thinks commercial real estate will lose 30% of its value in 2023, which will prompt banks to ask owners to put up more equity and increase pressure on lenders.

Signature Bank, which along with Silicon Valley Bank, collapsed in March, was the 10th biggest commercial real estate lender, according to data from Trepp. It estimates that banks hold $270 billion in commerical real estate loans due in 2023, with $80 billion of that portfolio, or one-third, on office properties.