EMPTY OFFICES ARE TICKING TIME BOMB FOR BANKERS IN PERSPECTIVE OF COMMERCIAL REAL ESTATE.

"Another banking crisis is looming, said The Economist. "A combination of nasty events" has produced a "hellish-perfect-dumpster-fire-storm" for investors in commercial real estate, landlords, and their financiers. Building owners are slowly accepting the idea that, thanks to remote and hybrid work, their office properties are "unlikely to fill up again" and are therefore worth "only half what they paid for them." In the extreme case of San Francisco, office vacancies have hit 33 percent, more than eight times the pre-pandemic level."

"Almost $1.5 trillion in U.S. commercial debt will need to be renegotiated in the next 24 months, according to Morgan Stanley, said Alena Botros in Fortune."

"The recent banking crisis will only "exacerbate the existing lack of liquidity" as banks tighten lending standards. Interest rates are 450 basis points higher than they were a year ago. Delinquencies could cut commercial real estate values by 40 percent, "worse than in the Great Financial Crisis." Unfortunately, "the wall of debt is set to get worse," said Neil Callanan in Bloomberg."

SOURCE:

https://www.google.com/amp/s/news.yahoo.com/amphtml/why-empty-offices-ticking-time-095505342.html

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