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Agree with your micro analysis. I also think in the current macroeconomic climate, CRE owners, and their banks/hedgies/reits or other bond/loan owners are cros
by mikhailfranco 2y ago
Agree with your micro analysis.
I also think in the current macroeconomic climate, CRE owners, and their banks/hedgies/reits or other bond/loan owners are crossing their fingers, turning a blind-eye to the telescope, holding their breath, and waiting for the Fed to lower interest rates.
Of course, if the Fed holds higher-for-longer (as many expect in the face of continuing high inflation), they will be waiting to exhale to the point of asphyxiation.
How did CRE go completely bankrupt? "Slowly, then suddenly."
- pas 2y agoIt would be prudent for the Fed and various market/banking authorities to start poking this as soon as possible. Either via commercial-to-residential conversion grants, or providing targeted restructuring loans to owners, and owners/managers should start offering the vacant space for free for non-commercial stuff. Vacancy is bad for cities and bad for inflation. Sure, maybe it's politically unfeasible, but still, turning up vacancy taxes would motivate commercial landlords to finally stop this wile-e-coyote running-in-the-air.