New York’s office block apocalypse is underway – you can’t give them away
Commercial property crisis threatens a fresh wave of US bank failures
Emergency lending by the US federal authorities has bathed America’s struggling regional banks in short-term liquidity, disguising the slow-burn damage of the US commercial property slump.
A sobering analysis by four of the country’s leading finance experts says this comfort blanket has created a beguiling illusion of stability.
The underlying crisis in the banking system continues to deepen as $5 trillion of commercial real estate debt taken out during the zero-rate era comes due in tranches.
“It’s not a liquidity problem; it’s a solvency problem,” said Professor Tomasz Piskorski
Ambrose Evans-Pritchard 5 January 2024
A rising wave of property defaults threatens hundreds of US banks
Lenders are still gambling on resurrection, a reflex of ‘extend and pretend’ in the hope that office rents will recover and that struggling borrowers will be able to service their debts again.
Ambrose Evans-Pritchard Telegraph 27 October 2023
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