Concerns are escalating in the US commercial real estate sector, with a looming 'debt bomb' of $1.5 trillion in commercial property-related debt due in the next two years, affecting not only office spaces but also apartment buildings. John Foley of @Breakingviews highlighted that the stress is now extending to apartment buildings, predicting a bumpy ride ahead. The Mortgage Bankers Association (MBA), as reported by @GlobeStcom, has revised its estimate of commercial real estate loans maturing in 2024 upwards by 47.7%, from $659 billion to $929 billion, attributing this increase to numerous extensions and loan modifications by lenders in recent years. This financial strain is exacerbated by a combination of steeper interest payments, tighter bank lending, and declining asset values, as noted by MSN. The situation has led to a surge in lawsuits over real estate agent fees, plunging the National Association of Realtors into a crisis. Meanwhile, transactions in the $20 trillion US commercial real estate market are beginning to recover, albeit at significant discounts, prompting global lenders to prepare for potential loan losses. This turmoil has raised systemic risk concerns among money managers, with fears that the commercial real estate sector's troubles could have widespread financial repercussions, potentially impacting HUNDREDS of banks. Rachel Mortimer and @business have also noted the impact of higher interest rates and stricter regulation on landlords, causing them to sell up and leading to less choice and higher rents for tenants. The concerns over systemic risk are further echoed in discussions about real estate woes causing turmoil in the financial sector, as highlighted by the hashtag #CMBS.
"Systemic Risk Concerns Grow Among Money Managers as Real Estate Woes Cause Turmoil" https://t.co/CiNIcuKswI https://t.co/UudZlZXd6R
Systemic Risk Concerns Grow Among Money Managers as Real Estate Woes Cause Turmoil @business #CMBS https://t.co/xwLuLjCepT
Landlords are selling up because of higher interest rates and stricter regulation, leaving tenants with less choice and higher rents, says Rachel Mortimer ⬇️ https://t.co/C6jhzGgTtY
Will empty offices cause the next banking crisis? Commercial real estate 'debt bomb' of $929 billion comes due this year with HUNDREDS of banks facing insolvency runs if default rates on the loans spike https://t.co/ZZAQuVcR1b https://t.co/dv9qex3dhU
Transactions in the $20 trillion US commercial real estate market are starting to pick up — at deep discounts that are forcing lenders around the world to brace for souring loans. Read The Big Take ⬇️ https://t.co/ZJfY33eQcf
COMMERCIAL REAL ESTATE IS IN BIG TROUBLE — AND THE PROBLEMS MAY HAVE MAJOR FINANCIAL FALLOUT (MSN) Problems for the US commercial real estate sector seem to be getting worse — and spreading. Steeper interest payments, tighter bank lending, and declining asset values have… https://t.co/3v1p5wlnbO
A wave of lawsuits over fees paid to real-estate agents has plunged the National Association of Realtors into a crisis. Brokerage executives are pressing it to settle. https://t.co/QFpSFoCbgb https://t.co/QFpSFoCbgb
The @MBAMortgage revised upwards estimated commercial real estate loans coming due in 2024 from $659 billion to $929 billion (+47.7%) due to the large number of extensions & loan modifications grated by lenders in recent years @GlobeStcom
From @Breakingviews: Concerns are growing over $1.5 trillion of commercial property-related debt coming due in the next two years. The stress, initially observed in office spaces, is now extending to apartment buildings. The ride will be bumpy, says John Foley https://t.co/p6oFM0Fnhv