(Bloomberg) -- Credit Suisse’s flagship real estate fund incurred deep losses for its investors last year as it got buffeted by the crisis in global real estate markets. 

The Credit Suisse Real Estate Fund International lost 22% on investments in 2023 because it was “unable to escape the developments on the global property markets,” according to a statement on Wednesday. The market value of its properties fell by 31% to 2.52 billion Swiss francs ($2.83 billion) as a result of devaluations and sales, it said. 

The decline in the office-focused fund comes as rising interest rates coupled with changing work and consumption patterns have upended commercial real estate across the US and Europe. Higher funding costs have created liquidity shortages for some real estate investors, sometimes prompting them to sell assets at steep discounts.

The crisis has swept away real estate developers and delivered a blow to banks with high exposures to commercial real estate as they set aside more money to cushion against credit defaults. Asset management products investing in the asset class have been affected too. 

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The Credit Suisse fund said it reduced its real estate portfolio by seven properties to 47 in 2023. Only properties were sold that no longer matched the core of the property portfolio from a future risk and return perspective, the firm said.

Net asset value per unit decreased to 727.16 Swiss francs ($816.2) as of December 31 from 961.39 Swiss francs the year before and the distribution per unit fell to 27 francs from 35. 

--With assistance from Jack Sidders.

(Updates with context throughout)

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