Many offices buildings are going to be 'obsolete' and losses are headed for banks and investors holding real estate debt, property exec says

• The highest tier of office buildings will continue to do well, property exec Scott Rechler said.
• "And then there's Class B office or lower-grade Class A that effectively is going to become competitively obsolete."
• That could lead to losses at the bank level and investor level, he warned.

A huge chunk of office buildings are going to be "obsolete," leaving real estate investors and banks left to weather the losses, according to Scott Rechler, the CEO of RXR Realty.

In an interview with CNBC on Tuesday, he pointed out that not all offices are the same, saying that the highest tier of buildings, known as Class A, will continue to do well as more people return to in-person work.