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Commercial real estate risks and outlook for 2024
Рет қаралды 15,554
Күн бұрынA National Bureau of Economic Research paper warned commercial real estate loan defaults could reach Great Depression-era levels if rates stay high. USC Finance Professor Erica Jiang discussed the risks on Yahoo Finance Live.
Jiang noted falling property cash flows, declining values, and refinancing challenges raising distress, especially for offices, multifamily, and hotels. She says "rising interest rates make it very difficult" to refinance, causing rollover issues.
With 15% of commercial loans already underwater presently, Jiang notes default outlooks now "don't look very good." She highlighted offices as particularly exposed, with 45% of office loans underwater, meaning the property value is below the loan amount. This makes refinancing unlikely as it "has high default risks."
#realestate #youtube #yahoofinance
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@s.gharavi1614 7 ай бұрын
A 10% default is very conservative for 2024.
@Ek0 6 ай бұрын
Great segment. Awesome research. Would make out w Erica 100%.
@fritzsmith3296 7 ай бұрын
A recent report on New York City's commercial empty office space was 95 million square feet.
@omercakmak3099 7 ай бұрын
very valuable stats thank you
@maxmedia7612 7 ай бұрын
That’s a very challenging situation for commercial real estate especially the office buildings. Debt to Valuations (LTV) and Debt Coverage Ratios paint a very stark picture. Falling property prices and an expectation of higher for longer interest rate don’t help either. Question is will this crisis in office real estate affect broader real estate market? Moreover will it have effects outside the US too and result in global real estate crisis?
@fritzsmith3296 7 ай бұрын
no
@JeremyGCRE 7 ай бұрын
Awesome information!
@TonyKimCre 5 ай бұрын
Industrial is second favorite for commercial real estate investment
@Anthony-dj4nd 7 ай бұрын
All i see everywhere is for lease signs
@KK-qc5ct 7 ай бұрын
Heres the work around. Bank advises client to sell building at auction. Loan holder buys building back for twenty percent of value and stiffs bank with loss. Bank cries to government for bailout.
@tfpnation6925 6 ай бұрын
You’re forgetting paying off the principal loan, which still falls on the borrower not the bank
@tomchoo3799 7 ай бұрын
This report basis Fed will not change their QT strategy even bank face liquidity issue in the future. I am not sure that will happen.
@notsecure 5 ай бұрын
So, what do average person should do? out of stock market? move out of my local bank?
@sadowhop 7 ай бұрын
Land and buildings lost it value??? Why the last 3 year all retail for rent or home around my area doubled and my business rent when up 40%. Am I missing something here?
@reempire888 6 ай бұрын
More than half of the new buildings in South San Francisco and downtown SF are empty. Thanks to work from home mandate. Don't believe me? Take a walk downtown San Francisco, it's scary dead. I'm not sure if we will ever recover.
@Lifeisgood745 7 ай бұрын
Aitx do they provide security for them?
@montielh 7 ай бұрын
Prepare your cash to jump on future opportunities…
@tripac3392 7 ай бұрын
We'll see the suits jumping
@Anthony-dj4nd 7 ай бұрын
Evergrandge😅
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