Bailout Part Deux? Prepare For “Very Ugly” Two Years Of CRE Turmoil With $2.5 Trillion In CRE Debt Maturing In Next 5 Years

Confounded Interest ^ | 01/28/2024 | Anthony B. Sanders

[Kaiser8408a]

Remember the massive bank bailout of “subprime” mortgage securities back that resulted in the Dodd-Frank banking legislation of 2010? Yes know, where they promised NO MORE BANK BAILOUTS EVER??? Particularly if Disease X in unleashed and we start shutting down economies and schools again. Will we see ANOTHER bank bailout??

Cantor Fitzgerald CEO Howard Lutnick spoke with Fox Business host Maria Bartiromo on the sidelines at the World Economic Forum in Davos, Switzerland, last week. He offered a bleak outlook on the commercial real estate sector, warning a “very ugly” two years is ahead.

“Commercial real estate is experiencing a meaningful repricing as cap rates correlate to long-term to interest rates,” Morgan Stanley told clients in a recent report, adding, “Patience is required while refinancing to higher debt costs gradually triggers valuation adjustments.”

Lutnick’s not the only one with a dismal outlook on CRE.

In a recent interview, Scott Rechler, Chairman and CEO of RXR Realty, told Goldman’s Allison Nathan that the CRE downturn is still in the early innings.

[ClearCase_guy]

2008 — lots of banks gave lots of people mortgages even if those people didn’t have jobs or income. It didn’t turn out well. But, on the whole, only the Little People suffered, because Big People got a bailout.

2024 — Commercial Real Estate is set to collapse in the post-COVID world. And I expect only the Little People will suffer, because the Big People will get a bailout.

Maybe it’s time for the Little People to figure out how much the Institutions hate their guts.

[PeterPrinciple]

CRE downturn is still in the early innings.

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[webheart]

Really clever use of the word deux.

[proxy_user]

Well, who holds this debt? Is it the banks, or someone else?

[Fungi]

Carbapenem-resistant Enterobacterales (CRE)