.gif)
Industry analysts warn of more pain to come in safest CMBS
.gif)
A 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.
- 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."
---------------------------------------------------------------------------------------------------------------
The worst is yet to come for commercial real estate: Incoming Oaktree co-CEO
Commercial Real Estate Sentiment vs. Reality
=========================================================================
---------------------------------------------------------------------------------------------------------------
ADDENDA references
No comments:
Post a Comment