Problem with #CRE goes like this. Occupancy falls, SQFT rental price falls, rent roll falls, then bldg value falls.reserves consumed. Lender seeks more equity to restore 50% LTV. Equity does numbas, walks away.... @blackstone
@rcwhalen @blackstone Sounds like a typical recessionary cycle
@rcwhalen @blackstone Recall all the money is retail and pensions.
@rcwhalen @zerohedge @blackstone Only CRE that survives this next wave is multi family.
@rcwhalen @zerohedge @blackstone Yeah waits for numbduhs to becomes hummmmmms
@rcwhalen @blackstone @rcwhalen this scenario assumes a large owners like Blackrock feel the prospect’s of returning to an historical norm for vacancy rates is NIL! Otherwise they just pay down the loan to meet covenants and wait it out. Or, they are plain out of cash. Either way it’s bad, real bad!
@rcwhalen @blackstone And it's $ozk that's first to fall among the banks?
@rcwhalen @blackstone If its too big a problem.. will banks just extend and pretend?
@rcwhalen @zerohedge @blackstone Banks need to start suing SF and other NIMBYs to allow mixed use residential zoning of commercial. Only way out.