Commercial RE Timebomb Ticks

We don’t know if the implosion will occur all at once, but make no mistake, commercial real estate is a disaster, and the ripple effects have not been felt yet. The exception is the the regional bank crisis, and the extraordinary measures taken a year ago.

Timestamps, y’all, this is a year old.

There is no solution, and after a year, the headlines have been relentless. The building on the left, in Ohio, was finally sold…at $9 a square foot. Banks and owners are selling commercial real estate at 50 cents on the dollar, if they can sell at all.

What We Don’t Know And May Never Know

  • Is the government preparing for ongoing bank and investor turmoil? Emergency measures are set to expire in March 2024. Oh boy.

  • Are banks actively reducing the value of the commercial real estate it owns, to reasonable, market levels?

Before someone stands behind his/her pulpit and makes statements like “the banks shouldn’t have taken on this much risk,” let me remind you that the reason the value of your home is so much higher is via this same mechanism. That leaves that person to “I only agree if the results are in my favor.” Got it.