I’ve been saying this for months, but my timing is obviously crap.
The market can remain irrational longer than you can remain solvent.
Deliberately done.
Can we call it a recession yet?
Watch as Fannie Mae, Ginnie Mac and all the Gov’t lenders whose debt is short term and off the books are forced to refinance at rates double the rates that they loaned it out in 30 year fixed rate mortgages.
bttt
The businesses had to institute work from home policies.
Once the all clear was sounded on one wanted to return to workplaces located in large cities where parking & commute were expensive. In addition the lull, in activity in the cities allowed the homeless to move in and take over, making the navigation to & from the parling spot to building became less than enviable tasks to navigate. So much nicer to roll out of bed walk into another room, and go to work.
Perhaps DJT will snap them up cheap & turn them into residential buildings.
The 2008 financial collapse was just the warm up to the main event
Kaiser8408a :" Biden, Congress and The Fed.
Terrorists of the middle class."
"No, this isn’t a John Kerry/Greta Thunberg hysterical warning about climate change.
But a storm created by 1) Biden/Congress spending splurge and 2) excessive monetary stimulypto by The Federal (Feral) Reserve.
Now that The Fed is withdrawing the excess stimulus, we are seeing a world of pain for commercial real estate.
A financial climate change!"
"Days after Barry Sternlicht’s Starwood Capital Group defaulted on a $212.4 million mortgage backed by an Atlanta office tower, Bloomberg released an eye-opening interview
with the billionaire investor about mounting distress in US commercial real estate."
"“We’re in a Category 5 hurricane,” Sternlicht said in an interview on June 28 taped for a July 25 release in an upcoming episode of Bloomberg Wealth with David Rubenstein."
"Sternlicht warned, “It’s sort of a blackout hovering over the entire industry until we get some relief
or some understanding of what the Fed’s going to do over the longer term.”
(My Opinion) : The fall out from the Biden economic policies have affected commercial office space ,
and as well, the commercial and retail stores that depend on traffic of the workers downtown in office spaces.
When you add inflation into the mix, workers are no long happy or willing to endure hours in traffic just to earn an income or living wage.
There is much discontent among workers forced to attend office duty for a wage that doesn't indicate that employers appreciate the additional expenses that workers have to endure.
This discontent is reflected in commercial office space and retail stores, and thus commercial real estate investors are unable to meet their mortgage obligations.
Could this chaotic economic situation be anymore severe than the financial housing crisis of 2008 and 2009 ?
Many people in the know are saying that there is a delayed exhaustion of funds by investors due to inflation and the covid crisis.
Consider in the vicinity of your residence, how many store fronts are now vacant, or shopping malls that have papered over display windows ?
Expect it to get worse now that interest rates have climbed up from "free money" into commercial real estate strangulation.
Build Back Better has now become Build Back Bankruptcies !
Consider this a "situational awareness" warning ...
I predicted this in March 2020 when office buildings were evacuated for remote working.
My small town has over 10 million square feet of empty space. A friend worked at a company that occupied 6 of 8 floors of one building. Now they have 1 and 1/2.
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The author fails to mention that many refuse to return to the city because the cities are filled with dangerous Democrat street thugs. I’m sure I’m not the only one who has “gone Galt”. In today’s socialist world, where politicians talk of forcing home owners to house illegal aliens, real estate ownership anywhere (commercial or residential) can rationally be viewed as a liability.