WFC - Commercial Real Estate: The Return Of 'Extend And Pretend'
2024-04-08 12:26:18 ET
Summary
- Some commercial real estate markets continue to experience substantial deterioration, leading to rising default rates amid record office vacancy rates.
- This is increasingly putting additional stress on the banking system, particularly regional and community banks. The return of 'Extend and Pretend' has also pushed many debt maturities into 2024.
- However, outside a near V-shaped recovery in commercial real estate, eventually some financial institutions will need to pay the piper.
- We take a look at the downtrend in many parts of the commercial real estate space and which banks could be impacted the most in the paragraphs below.
Well, if there is one good thing about the substantial deterioration of key sectors of the commercial real estate, or CRE, market over the past few quarters, it is giving the financial writers at the NY Post plenty of fodder as loans on numerous skyscrapers succumbed to market forces and resulted in " jingle mail ." Last week, it was a $240 million mezzanine loan connected to Brooklyn's tallest building (93 stories) that went into default and now faces foreclosure ....
Commercial Real Estate: The Return Of 'Extend And Pretend'