US Commercial Real Estate
The US commercial real estate sector is under considerable stress. Will it become the next subprime?
Despite every effort, downtown businesses have not been able to get all their workers back because they liked foregoing the long commute.
Commercial real estate valuations are falling and properties are difficult to sell.
The number of properties with negative equity is increasing.
Commercial real estate delinquency rates have already jumped to 6 1/2 percent—up 30 percent in a matter of months. Rates of distress in office loans just hit 11 percent.
$929 billion of commercial real estate debt is coming due before the end of the year. That’s up 28 percent from the previous year.
National Bureau of Economic Research has estimated that up to 385 American banks could fail over commercial real estate loans alone.
The FDIC is essentially guaranteeing more than $20 trillion in deposits with just more than $100 billion in reserves.
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