Posted on 03/27/2023 3:52:23 AM PDT by RomanSoldier19
Again, we turn to real estate – but unlike 2008-09, when residential real estate loan portfolios started the Great Recession, this time all eyes will likely be on commercial real estate.
So, what does that mean?
To make sense of the situation, we looked at the overall commercial real estate data tracked by Trepp, a data analyzer in the field of structured finance and commercial real estate.
Trepp estimates that about $2.3 trillion in commercial real estate debt is held by smaller banks, more than 70 percent of the total CRE debt. The company’s guidance released earlier in the month shows that more than $270 billion of commercial mortgages held by financial institutions will expire by the end of the year, meaning borrowers either need to pay off the loans or refinance the package.
Bloomberg Intelligence (BI) analysts estimate the number may be even higher when multifamily mortgage debt is taken into consideration. BI estimates as much as 40 percent of the total $3.5 trillion CRE debt is held by banks.
(Excerpt) Read more at bizjournals.com ...
CMBS is what everyone I know is watching. It doesn’t bode well. The pandemic created a monster no one really considered. The discovery of work from home, work remote and the refusal of cubicle people to come back to the cube.
Businesses nationwide are looking to dump paying for the rent on spaces they are not using. Landlords didn’t get paid for nearly 3 years on rental units.
This fall...this fall is going to be horrific. People are saying put the homeless up in those buildings etc. That still doens’t resolve the problem of who is paying the rent.
Office space is only a portion of commercial real estate. The banking problem will grow but may not be what 2008 was.
>> That still doens’t resolve the problem of who is paying the rent.
Why sure it does, silly! Uncle Sugar! Same as always!
After all, Uncle Sugar is sitting pretty on THIRTY TRILLION DOLLARS in reserves! (Oh wait, those are negative reserves...)
Besides not working in cubes, people have been ordering online instead of going to physical stores.
With the increases in theft, physical stores are at a disadvantage to online stores.
I live in an area that is relatively wealthy and overall, busy. But the major office buildings are mostly empty, with two signs in the window: 1 - Office space available for lease; and, 2 - work space available. No building that is mostly full would have either sign in the window and you are left with the only possibility being conversion to residential condos (not easily done for a differently configured office building) which will make traffic and crowding much worse.
Yep. As I tell recruiters, I am available for 100% remote roles only. I haven’t had a problem getting contracts.
Wait until everyone possible is WORKING FROM HOME-—and then the Governments change the ZONING laws-—OUTLAWING such arrangements——OR TAXING your residential property as COMMErCIAL property-—
Don’t think so???
THINK AGAIN
The Fed is ready—they will buy up all the worthless paper and make the banks whole.
You heard it here first.
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