In case you've still got money in a bank, Bloomberg is warning that defaults in commercial real estate loans could "Topple" hundreds of US banks.
The note, by Senior Editor James Crombie, walks us through the festering hellscape that is commercial real estate.
When the Fed panic-hiked interest rates in the 2021 inflation, that put trillions of commercial real estate underwater even without other factors.
We're starting to see glitches in the matrix; New York Community Bank just went through a near-death experience over its garbage portfolio of commercial real estate loans, dropping almost 80% before it was bailed out by vulture investors while the megabanks hover like megavultures.
Potentially a lot more: a recent study from the National Bureau of Economic Research estimated that up to 385 American banks could fail over commercial real estate loans alone.
These would overwhelmingly be small regional banks, who typically hold a third of their assets in commercial real estate loans.
Commercial real estate delinquency rates have already jumped to 6 and a half percent - up 30% in a matter of months.
https://brownstone.org/articles/the-meltdown-of-commercial-real-estate/
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