Risk of default is rising for $1.2 trillion of commercial real estate debt
1 year, 6 months ago

Risk of default is rising for $1.2 trillion of commercial real estate debt

LA Times  

Defaults on properties such as offices and apartment buildings may increase as property values fall and costs rise for landlords who need to refinance at higher interest rates. About $1.2 trillion of debt on U.S. commercial real estate is “potentially troubled” because it’s highly leveraged and property values are falling, according to advisory and services company Newmark Group. “I’m shocked that hasn’t happened a lot more.” Newmark defines “potentially troubled” as properties where debt represents at least 80% of the real estate’s marked-to-market value, based on price indexes including Green Street’s. Banks, which have tightened lending since this year’s collapse of Silicon Valley Bank, carry the biggest share of at-risk debt, with $303 billion of potentially troubled loans maturing through 2025, according to Newmark.

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History of this topic

The zombie office timebomb: Commercial real estate foreclosures jumped 117% in March - as experts warn it could trigger the next banking crisis
10 months, 3 weeks ago

The zombie office timebomb: Commercial real estate foreclosures jumped 117% in March - as experts warn it could trigger the next banking crisis

Daily Mail  

Commercial real estate foreclosures are ramping up across the US as soaring interest rates and the slow return of workers to office spaces begin to take their toll. Commercial real estate foreclosures are ramping up across the US as soaring interest rates and the slow return of workers to office spaces begin to take their toll Economists last month found …

Potential 'time bomb' for US economy looms as $1.5 trillion in real-estate mortgages will come due
1 year, 9 months ago

Potential 'time bomb' for US economy looms as $1.5 trillion in real-estate mortgages will come due

Daily Mail  

Some $1.5 trillion in real-estate mortgages will come due in the next two years - paving the way for a potential financial crisis as higher interest rates push down property values. The long answer is, 'hell yes,'' Senior Senate Banking Committee member John Kennedy said Monday of the looming commercial real estate crisis - an increasingly likely event that many …

The Ticking Time Bomb in America’s Downtowns
1 year, 9 months ago

The Ticking Time Bomb in America’s Downtowns

Slate  

They call it the “debt wall,” and it is not the kind of wall that protects you. It is creeping up for office space in particular, but don’t let downtown’s struggles cloud your vision: Most office space is suburban, and most “commercial real estate” is not office space—it is also composed of medical offices and malls and warehouses and data …

Office landlords squeezed by falling occupancy rates, refinancing difficulties. Here’s why
1 year, 9 months ago

Office landlords squeezed by falling occupancy rates, refinancing difficulties. Here’s why

Associated Press  

LOS ANGELES — The failure of several large lenders earlier this year and the banking turmoil that followed have fueled worries for owners of office space such as Boston Properties and Vornado Realty Trust. The sharp runup in interest rates by the Federal Reserve over the past year and a slowing economy had already set the stage for office building …

A lot of offices are still empty — and it's becoming a major risk for the economy
1 year, 10 months ago

A lot of offices are still empty — and it's becoming a major risk for the economy

NPR  

A lot of offices are still empty — and it's becoming a major risk for the economy Enlarge this image toggle caption Arezou Rezvani/NPR Arezou Rezvani/NPR The next big potential risk to the U.S. economy may be lurking in corporate towers across the country's downtown districts. Sponsor Message It's a troubling development for the commercial real estate industry at a …

American offices are half-empty. That could be the next big risk for banks
1 year, 11 months ago

American offices are half-empty. That could be the next big risk for banks

CNN  

London CNN — From Dallas and Minneapolis to New York and Los Angeles, offices sit vacant or underused, showing the staying power of the work-from-home era. Asked about the danger posed by commercial real estate, Federal Reserve Chair Jerome Powell said last month that banks remained “strong” and “resilient.” But attention is growing on the links between US lenders and …

Opinion | Rethinking real estate, as tenant, owner, investor
4 years, 10 months ago

Opinion | Rethinking real estate, as tenant, owner, investor

Live Mint  

One good thing out of the pandemic crisis has been the letting go of the physical monitoring and keeping tabs on who is leaving office when that is such a feature of work culture in India. Just this one decision is going to change the way we think about real estate—as tenants, landlords and investors. A newspaper report says that …

Real estate market to see short-term adjustment: Report
8 years, 8 months ago

Real estate market to see short-term adjustment: Report

China Daily  

Models of residential buildings are seen at a property showroom in Chenggong district of Kunming, Yunnan province, April 14, 2016. The property market is expected to see a short-term adjustment from the second half of 2016 to the first half of 2017, and developers may face credit default risk due to fragile capital chain, Economic Information Daily reports. Since the …

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