How Much Strain Is the Commercial Real Estate Market Showing? It’s a Complex Issue.
March 29, 2023 | Elaine Misonzhnik | WealthManagement.com
It is a precarious time for commercial real estate investors. It’s not clear if the worst of the fallout from the failures of Silicon Valley and Signature banks has passed. Some market observers warn that hundreds of additional regional banks might be facing as similar imbalance between the assets and liabilities on their books. The Federal Reserve recently raised its key interest rate by another 25 basis points, making debt more expensive for property owners who might need refinancing in the coming months.
To make matters worse, media outlets across the spectrum are publishing stories about how commercial real estate might Is th “the next shoe to drop” for U.S. banks after crypto and tech start-ups.
But are these assessments accurate? We spoke to Jim Costello, chief economist at data firm MSCI Real Assets, and Alexis Maltin, vice president, real assets research, Americas, with the firm, about how concerned investors ought to be about what’s happening in the banking sector, how difficult it might be to refinance their debt and whether the current environment offers any opportunities for savvy market players.
