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The ticking time bomb with commercial property is the debt. Many commercial real estate ventures are leveraged to the hilt. This is not unlike the housing crisi
by sulam 6y ago
The ticking time bomb with commercial property is the debt. Many commercial real estate ventures are leveraged to the hilt. This is not unlike the housing crisis, although hopefully less painful because some underlying structural factors are less extreme (the government hasn’t felt obligated to buy the debt, unlike with home mortgages).
- JMTQp8lwXL 6y agoThe same can be said for so-called 'Zombie' corporations. Many of them aren't growing and subsist because they have access to large quantities of low-interest debt, and partially due to the fact they employ many people, and one of the Fed's mandates is to promote low unemployment rates. When a lot of commercial real estate is sitting un- or underutilized, that's less workers and economic activity occurring.