Watch out for commercial real estate
Mar 27, 2023
The recent problems in the banking sector appear to be self-inflicted by the weakest players. So far, so good. However commercial real estate may be the next bigger structural headache to come for investors and banks alike. A toxic combination of higher interest rates, a possible recession and more work from home after the COVID crisis could indeed have bad consequences. US banks are very exposed at a time when we see the first high profile defaults of commercial real estate funds and share prices of listed vehicles falling. We believe what is true to the US applies globally: watch out for commercial real estate.