Thread regarding Wells Fargo & Co. layoffs

Real Estate Doom Loop Threatens America's Banks

WSJ via https://archive.ph/bhqTB

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Over the past decade, banks also increased their exposure to commercial real estate in ways that aren’t usually counted in their tallies. They lent to financial companies that make loans to some of those same landlords, and they bought bonds backed by the same types of properties.
That indirect lending—along with foreclosed properties, trading portfolios and other assets linked to commercial properties—brings banks’ total exposure to commercial real estate to $3.6 trillion, according to a Wall Street Journal analysis. That’s equivalent to about 20% of their deposits.
The volume of commercial property sales in July was down 74% from a year earlier, and sales of downtown office buildings hit the lowest level in at least two decades, according to data provider MSCI Real Assets. When deals begin again, they will be at far lower prices, which will shock banks, said Michael Comparato, head of commercial real estate at Benefit Street Partners, a debt-focused asset manager. “It’s going to be really nasty,” he said.

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| 1023 views | | 3 replies (last September 8, 2023) | Reply
Post ID: @OP+1ouzZt9U

3 replies (most recent on top)

Convert all the office buildings to residential apartments or condos. Downtown in Durham NC has succeeded in doing that.

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Post ID: @1tjk+1ouzZt9U

@occ

Exactly! Pivot and innovate. Where are all those geniuses who brag about being forward-thinking leaders? We can do this - and have before w/other revolutions (industrial, automotive, digital, etc.)

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Post ID: @1ser+1ouzZt9U

Burn it all down. Rip off the bandaid. We need a massive and fundamental shift in urban/suburban property use to put these built spaces to practical and economically viable use.

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Post ID: @occ+1ouzZt9U

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