Going Down! CMBX Declines Below 70% As Fed Hikes Rates (Trouble In Commercial Real Estate?)

Confounded Interest ^ | 03/27/2023 | Anthony B. Sanders

[Kaiser8408a]

Freddie King said it best. We’re going down. At least the commercial real estate market.

As The Fed raises rates to combat inflation, we are witnessing a serious decline in Markit’s CMBX BBB S15 index.

We’re going down, at least the commercial real estate market.

Here is a photo of Treasury Secretary Janet Yellen ready to address problems in the commercial real estate market.

[Kaiser8408a]

Everything is deteriorating under Biden except jobs.

[milagro]

Yup. Biden has been amazingly skillful in accomplishing the mission Xi assigned him:
Destroy the USA.

[ckilmer]

There’s no way that the commercial real estate market will come back anytime soon with most people working from home

[Brian Griffin]

Many people don’t have enough discipline to work efficiently at home.

There is also the power of collaboration that gets mainly lost when working from home.

My neighbor Nick works from home because the teams he manages are spread around the world. He makes phone calls from 7am to 11pm.

[Brian Griffin]

About 45 years ago strip shopping centers were the weak ones in commercial real estate.

[Brian Griffin]

https://confoundedinterest.net/2023/03/26/short-sellers-step-up-bets-against-office-owners-on-bank-turmoil-small-banks-hold-70-of-commercial-re-loans-as-fed-continues-its-fight-against-inflation/

Personally, I tend to think big banks lend on the office towers and the smaller banks on strip mall and smaller structures.

The article has a disturbing graph allegedly showing small bank reserves & assets.

[Sgt_Schultze]

The trouble here is the US's most expensive commercial properties are in cities run by people who tacitly permit their voters to prey on non-resident commuters. Those people don't want to become another statistic, so they resist working in those downtowns, paying for parking, buying lunches, shopping, and otherwise infusing money into area businesses. What a wonderful world THEY have voted for.

The next thing on the agenda is the elimination of those same jobs done between one's ears, by employing AI technology.

[cgbg]

The Fed will have to step in and “save the banks” and buy the junk paper.

This is as predictable as a junkie’s plan for the next day—get another fix.

[cableguymn]

No. Those are too

[Brass Lamp]

There’s no way that the commercial real estate market will come back anytime soon with most people working from home

It's been overplayed for a long time. I've seen strip malls being built and left empty in all sorts of markets, and it's been going on for over a decade. The market has to catch up to that reality, and so do the speculators who participate.