Despite many CEOs’ pleas and threats for their employees to return to the office, office vacancies hit a record high of 13.3% in August, according to the National Association of Realtors. And overdue commercial real estate loans also hit a 10-year high last month as property values in the sector continue to sink amid higher interest rates.

Muddy Waters fears that this means “a large number” of Blackstone Mortgage Trust’s borrowers will be unable to refinance or repay their loans in 2024. The investment firm estimates that between 70% and 75% of Blackstone Mortgage Trust’s U.S. borrowers are currently “unable to cover interest expense from property cash flows.” That could, per Muddy Waters’ estimates, lead to losses of between $2.5 billion and $4.5 billion for the REIT. 

In other words, Blackstone Mortgage Trust’s $4 billion market cap is “at risk of being completely wiped out by these losses,” the short-seller’s report warns. While the REIT hasn’t faced issues yet because it has been able to extend and modify loans for clients, that can’t last forever, according to Block.

“There’s been a lot of extending and pretending when things have been backed by paper profits,” he told Bloomberg at the Sohn investment conference in London on Wednesday. “It’ll be the second half of next year that we’ll really start to see losses.”

Once losses begin to pile up in the second half of 2024, Muddy Waters expects Blackstone Mortgage Trust will be forced to cut its dividend, which has soared to nearly 12%. Even the increasing prospect of interest rate cuts from the Fed that could provide relief for the commercial real estate sector in the form of cheaper loans would be “too little, too late,” according to the short-seller.

Blackstone Mortgage Trust did not immediately respond to Fortune’s request for comment, but a spokesperson told Bloomberg in a statement that the REIT is “well positioned to navigate this environment,” adding that they believe ”Muddy Waters’ report was “self-interested,”  “misleading,” and “designed solely…for the short seller’s own benefit.”

Blackstone Mortgage Trust’s stock sank 8% on Wednesday after the release of Muddy Waters’ report.

Block’s Muddy Waters is one of a few noted short-sellers who have risen to fame over the past decade for making large, and often quite profitable, bets against a myriad of companies, foreign and domestic. 

Founded in 2010, the investment firm burst onto the scene in its first year of operation by shorting shares of China’s Rino International, a formerly Nasdaq-listed maker of desulfurization gear for steel plants. Block warned at the time that the company was misstating its revenue and making misleading claims about its status as an industry leader in key steel markets. 

Rino International was eventually delisted from the Nasdaq, and the CEO and his wife, the company chairman, faced U.S. Securities and Exchange Commission charges of overstating revenues and diverting money for personal use.

Since then, Block has made big bets against a number of firms, including the medical supplier St. Jude and the European real estate company Corestate Capital Holding SA. However, in an interview with Bloomberg earlier this year, Block said that his short-selling days may be ending in the next few years, noting that the toll of corporate lawsuits against his firm for its negative reports is taking its toll.

Of short-selling, he said, “It is a decent living, but per unit of brain damage, it’s definitely one of the worst businesses in the asset management industry.”