Submitted by QTR's Fringe Finance
I‘ve been harping on the problems in commercial real estate for years now, and one of the more interesting developments over the last several months has been how little anybody seems to be talking it them anymore.
For a while, commercial real estate was supposedly going to bring down the banking system. Then the regional bank failures came and went, the Federal Reserve helped stabilize the financial system, and the market collectively decided that the problem had been contained.
But just because something has disappeared from the headlines doesn’t mean it has disappeared from the balance sheet. In fact, I would argue that we’re approaching precisely the point in the credit cycle when some of the more serious problems should start revealing themselves.
Credit conditions are tightening, borrowing costs remain elevated, and we’re beginning to see signs of strain in private credit. It would be remarkable if commercial real estate, which spent the better part of the last decade gorging itself on cheap financing, somehow emerged from this environment completely unscathed.
And now we have some new numbers that suggest the problem is very much alive.
According to a READ MORE AT SOURCE »
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