I see it as two separate problems with two separate time frames. The immediate problem is the financial problem that market valuations for these properties have sunk drastically below the valuations of the debt issued against them. This is similar to the SVB and regional banking crisis systemic risk of last March where the banks were holding a bunch of bonds as collateral that were underwater.

The longer term problem is the occupancy issue, lack of demand for space and changing requirements of space.

The fed can probably inject enough liquidity to fix the first issue, or at least make it a manageable crash, which is why I remarked that the crash is coming so slowly that the fed might fix it unintentionally. Fed injects liquidity for other reasons (likely to support treasury/bond market) and some of that flows into CRE buoying valuations enough to make it at least not an unmitigated disaster. I think with the headwinds CRE won't be the first place capital flows when the spigot gets turned on but it might get enough drips from a waterfall to stay afloat.

The fed cannot fix the long term issues. That requires actually redeveloping property and probably converting a lot of it to residential, which is a regulatory mess and a highly expensive and time consuming undertaking.