The problem is more than commercial office properties. Residential is also looking pretty ugly. And all these issues are tied to the banking sector, which is not looking pretty. We could see a variation on 2007-2008; nothing substantial was fixed, just papered over.
http://www.zerohedge.com/news/2024-04-14/real-estate-slow-burn
The Real Estate Slow Burn...
The Macro Butler's Photo
by The Macro Butler
Sunday, Apr 14, 2024 - 0:32
Amidst the return of the inflation boomerang and the weaponizing economy, and as ‘Forward Confusion’ continues to spread, investors overlooked the simmering crisis in Commercial Real Estate. However, the issue of vacant office buildings in American cities, transforming them into post-Covid wastelands, will impact the US economy in the coming quarters and beyond. Some pundits suggest that this surge in empty commercial real estate could lead to an utopian turnaround, but the potential for an "Urban Doop Loop" triggered by CRE should be widely acknowledged as a possible catalyst for a broader economic meltdown in a still inflationary environment. According to a new report from Moody's Analytics, there are more dormant office towers in the United States than at any point since 1979. This rise in vacancies is driven by a combination of remote and hybrid work trends, prompting companies to reduce their corporate footprints. Additionally, companies are relocating from ‘blue’ progressive cities and high-taxed states to red ones while downsizing their space.
(Continued with LOTS of Charts)
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