We could not find any results for:
Make sure your spelling is correct or try broadening your search.

Trending Now


It looks like you aren't logged in.
Click the button below to log in and view your recent history.

Hot Features

Registration Strip Icon for tools Level up your trading with our powerful tools and real-time insights all in one place.

The Commercial Real Estate Problem Is Far From Over

Share On Facebook
share on Linkedin

Although the pandemic may seem to be behind us, its impact is still being felt. And it’s not just about rising prices and the Federal Reserve raising interest rates, but also about a change in people’s behaviour.


Suddenly, many realised that working from home is not so bad. However, this change in mindset has had consequences that go beyond telecommuting. It is affecting the demand for office space and has even caused companies like WeWork to collapse.

Once valued at a staggering $47 billion, WeWork is now worth just $44.08 million. The good news is that they are not entirely out of the game yet. Their customers, investors and franchisees outside the US and Canada will not be affected.

However, the overall situation in the commercial real estate market is far from rosy.

The slowdown in the sector is starting to impact the economy as a whole – The Fed warns of the risk to stability of a $24T commercial real estate market. Banks are already struggling with problem real estate loans, making it difficult to make new loans.

According to the FT, US banks’ commercial real estate loan delinquencies have reached their highest level in a decade, as higher interest rates, an uncertain economy and increased telecommuting put pressure on building owners.

At BofA, the volume of real estate loans for which the bank had forgiven interest or extended maturities increased by nearly $750 million to $1.2 billion. Industry-wide, the volume of restructured commercial real estate loans increased by $6 billion to $8.5 billion.

Looking ahead, even if the Federal Reserve stops raising interest rates, the problems in the commercial real estate market will not magically disappear. This means banks could face even greater challenges.

So, not writing off safe-haven assets such as gold (XAUUSD) could present opportunities for investors. Overall, it is a difficult time for the commercial real estate market, but with careful monitoring and strategic decision-making, there is still hope for recovery.


CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

Leave A Reply

Do you want to write for our Newspaper? Get in touch: