The commercial real estate sector is facing significant challenges, as highlighted by recent reports and actions from major financial players. A mid-year outlook report from June 23 indicates that net absorption of office space is expected to be negative in 2024, with a projected -63 million square feet, and -7 million square feet the following year. Canadian pension funds, managing $1.24 trillion, are retooling their property divisions due to substantial losses. Banks, fearing further losses, are quietly offloading real estate loans. Some Wall Street banks are particularly concerned that landlords of vacant and struggling office buildings will be unable to pay off their mortgages, prompting them to sell their commercial real estate loan portfolios. Experts warn that trillions of losses are hidden in commercial real estate portfolios, with banks employing 'extend and pretend' strategies to manage the situation. There is a growing concern that the severity of the problem is not fully understood by the general public.
Some Wall Street banks, worried that landlords of vacant and struggling office buildings won’t be able to pay off their mortgages, have begun offloading their portfolios of commercial real estate loans hoping to cut their losses. https://t.co/6u8kBUpulw
Trillions of losses hidden in commercial real estate portfolios - banks "extend and pretend" 🙈 Worst case, govt will bail out the banks and add it to Fed balance sheet - np! “The general public does not have a sense of the severity of the problem.” https://t.co/EKmvn4oWJW
Fearing Losses, Banks Are Quietly Dumping Real Estate Loans https://t.co/V3EllVd0yD
Real Estate Bets Gone Wrong Roil $1.24 Trillion Canadian Funds @business #CMBS ▪Pensions are now retooling property divisions after losses ▪Funds are dealing with challenges at some office properties
Commercial property mid-year outlook: ‘cracks are forming beneath the surface’ #CMBS “On the office space, net absorption is expected to be negative in 2024 at -63M square feet and -7M square feet next year, the report said.” https://t.co/Ym2oAlVDRM