The rise in interest rates, remote work trend, and dominance of e-commerce sellers have combined to hammer the commercial real estate market over the past few years, leading to high vacancies, falling rents, and rising default risks. The IMF reported last week that U.S. commercial real estate prices have fallen 11% since March 2022, which is the worst decline in over 50 years. Cantor Fitzgerald's billionaire chairman and CEO Howard Lutnick predicts between $700 billion to $1 trillion of defaults over the next two years due to rising interest rates, leading to a "generational change" in real estate. The Mortgage Bankers Association estimates that approximately 25% of commercial real estate debt maturing by the end of 2025 is held by struggling office and retail space operators, who are at risk of default due to rising interest rates. Lutnick warns that the Fed's interest rate hikes are like a "steamroller" that is impacting the real estate market and the economy as a whole, with some experts fearing that defaults could trigger a doom loop affecting regional banks and eventually the entire economy.
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https://read.distractionfree.site/fortune/2024/01/22/billionaire-ceo-commercial-real-estate-1-trillion-dollars-defaults-howard-lutnick/
#commercialrealestate #interestrates #remoteworktrend #ecommerce #vacancyrate #fallingrent #defaultrisk
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2024-01-23 04:54:02
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npub19vqkmyttvpwpul5njms9ej6hgc30e2t03shnx9dzyvy4gwstcc4s0mj236Published at
2024-01-23 04:54:02Event JSON
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"content": "The rise in interest rates, remote work trend, and dominance of e-commerce sellers have combined to hammer the commercial real estate market over the past few years, leading to high vacancies, falling rents, and rising default risks. The IMF reported last week that U.S. commercial real estate prices have fallen 11% since March 2022, which is the worst decline in over 50 years. Cantor Fitzgerald's billionaire chairman and CEO Howard Lutnick predicts between $700 billion to $1 trillion of defaults over the next two years due to rising interest rates, leading to a \"generational change\" in real estate. The Mortgage Bankers Association estimates that approximately 25% of commercial real estate debt maturing by the end of 2025 is held by struggling office and retail space operators, who are at risk of default due to rising interest rates. Lutnick warns that the Fed's interest rate hikes are like a \"steamroller\" that is impacting the real estate market and the economy as a whole, with some experts fearing that defaults could trigger a doom loop affecting regional banks and eventually the entire economy.\n\nRead this story from \"Fortune\" for free without being tracked.\n\nhttps://read.distractionfree.site/fortune/2024/01/22/billionaire-ceo-commercial-real-estate-1-trillion-dollars-defaults-howard-lutnick/\n\n#commercialrealestate #interestrates #remoteworktrend #ecommerce #vacancyrate #fallingrent #defaultrisk",
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