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I'm wondering what is going to happen to the banking sector as the commercial real estate apocalypse starts to manifest in full ... banks have a lot of interest
by breatheoften 3y ago
I'm wondering what is going to happen to the banking sector as the commercial real estate apocalypse starts to manifest in full ... banks have a lot of interest bearing loans for commercial real estate that is going to continue turning into increasing quantities of illiquid pure junk in the very near term as leases end coincident with a mass cost cutting environment and occupancy rates drop even more ... obviously this has been a concern for awhile but seems like we are approaching a real inflection point
- SeanAnderson 3y agoStill have a little ways to go for this, but yeah, agree. IMO, CMBS has the highest likelihood of being the next MBS catastrophe. https://finance.yahoo.com/quote/HPP/ https://finance.yahoo.com/quote/HPP/ Hudson Pacific is who I've been following to track the health of San Francisco's commercial real estate market. I believe they have the largest public position in SF real estate. They're down 85% since 2020. This tracks with articles like https://www.wsj.com/articles/san-francisco-commercial-real-estate-office-buildings-471742ea https://www.wsj.com/articles/san-francisco-commercial-real-e... implying some commercial real estate in downtown SF is being devalued by 60-80%. As a counter-point, https://fred.stlouisfed.org/series/DRCRELEXFACBS https://fred.stlouisfed.org/series/DRCRELEXFACBS commercial real estate delinquency rates haven't begun ticking up yet and are nowhere near the levels of '08. May we live in interesting times and all that. :)