Columbia Property Trust, which owns top-tier office properties in gateway cities from New York to San Francisco, has defaulted on a $1.72 billion floating-rate loan backed by seven of its owned towers housing well-known tenants including WeWork, Twitter, BuzzFeed and Snapchat.

It’s the latest sign that higher interest rates, cost-cutting efforts by large technology firms and a pandemic-driven hybrid working trend are increasingly pressuring even some of the largest real estate investors and office developers.

The loan, which has a current interest rate of 5%, is 30 days delinquent, according to CoStar data. Borrowing costs have risen after the U.S. central bank raised its benchmark interest rate eight times since March to nearly 5% from less than 1%.

Wells Fargo is the special servicer of the loan, CoStar data shows. A special servicer’s job is to perform loan workouts with options such as extension, forbearance, modification, foreclosure, deed in lieu of foreclosure, or an outright sale.

“We, like most office owners, are addressing the unique and unprecedented challenges currently facing our asset class and customer base,” a spokesperson for Columbia said in an email to CoStar News, declining to comment further. “We have engaged with our lenders on a restructuring of our loan on seven properties within our larger national portfolio.”

A spokesperson for investment giant Pacific Investment Management Company, known as Pimco, which bought Columbia in a $3.9 billion deal, declined to comment.

The seven properties are, according to CoStar data, in New York, 229 W. 43rd St. in Times Square, which counts BuzzFeed and Snapchat among its tenants; 245 W. 17th St., where Twitter is the only tenant with a footprint spanning nearly 148,000 square feet; and 315 Park Ave. S, where Equinox and Amazon’s Twitch are among some of the largest tenants, according to CoStar data. In San Francisco, they include 650 California St., where WeWork is among the tenants, and 201 California St., where News Corp.’s Dow Jones is the largest tenant, CoStar data shows. The two other properties involved are 116 Huntington Ave. in Boston and 95 Christopher Columbus Drive in Jersey City, New Jersey, just across the Hudson River from Manhattan.

Bloomberg News earlier reported the news.

The office loan default comes at a time when the country’s return-to-office rate hovers just around 50% nearly three years since the start of the COVID-19 pandemic that has raised questions about companies’ space needs.

Concerns about a looming recession, among other worries, also have led to many tech and other companies to cut jobs and pause or curtail real estate expansion plans.

Boston Properties Chief Executive Owen Thomas recently noted “commercial real estate markets are currently in a recession,” while Vornado Realty Trust Chief Executive Steven Roth, while saying companies want people back to the office, recently acknowledged “Friday is dead forever. … Monday is touch and go.”

The office vacancy rate in New York, the largest U.S. commercial property market, has surged to a new record high of 13%, while in Los Angeles, in another example, the rate has surged to an all-time high of 15%.

The list of office loans that have defaulted or become at risk is growing.

Brookfield recently defaulted on loans tied to a pair of Los Angeles office towers in another indicator of distress for that city’s downtown.

In New York, developer RXR is seeking to restructure debt on 61 Broadway, a 34-story tower in Manhattan’s financial district, while a Related Cos.-tied investment manager and BentallGreenOak are having similar conversations with creditors about a $150 million warehouse-to-office conversion project in Long Island City, the Wall Street Journal reported.

“It’s almost a daily occurrence — default on large mortgages based on the changing lending and ‘ultimate use’ environment,” Richard Rubin, founder and chief executive of Repvblik, which redevelops all classes of real estate into workforce housing, said in an emailed statement to CoStar News. “When the world has changed as it has over the last three years since the onset of the pandemic, [New York City] has seen unprecedented office vacancy; this coupled with remote work has seen a number of casualties with more to come, likely lots more to come.”

The delinquency rate for U.S. office loans packaged and sold to investors on the commercial mortgage-backed securities market inched up a quarter point to 1.83% in January from 1.58% in December even as the average across all properties declined to 2.94% from 3.04% during the same time, according to a report by Trepp, a real estate data provider.

Some 20.8% of a $65.5 billion outstanding loan balance that’s backed by office properties in New York, Chicago and San Francisco, the three “most concentrated” office markets in the United States, have a “rollover risk” through the end of 2024, bond-rating firm DBRS Morningstar said Thursday in a report.

“While office properties have weathered the initial impacts of the [COVID-19 pandemic], office demand is in the midst of a paradigm shift as companies determine how much space they will need going forward,” DBRS Morningstar said in the report. “Older, inferior Class B/C offices will likely take the first hit; however, even Class A offices in major markets could be affected. Corporate real estate downsizing will lead to shrinkage in office demand, which will force average occupancy and rental rates to adjust to a new normal.”

While pre-pandemic, a 15% increase in vacancy at a property in a market such as New York, Chicago or San Francisco would not necessarily be cause for alarm, that’s a different story amid evolving office demand that makes it difficult for owners of even older Class A buildings in major markets to refill the space, DBRS Morningstar said.

The office sector isn’t the only one feeling the pinch of higher borrowing costs.

A $270 million Blackstone Group floating-rate loan backed by 11 Manhattan residential rental properties has gone into special servicing while Vornado’s Fifth Avenue and Times Square joint venture defaulted on a $450 million loan tied to the retail property at 697-703 Fifth Ave.