The Commercial Real Estate Bust Is Here
Jul 31, 20207.6K Shares692.1K Views
Looks like I spoke a little too soon earlier. Calculated Risk pointsto a Reuters reportexplaining that strip mall owners suffered their worst second quarter in 30 years, due to so many store closings and cutbacks. It’s another sign of the declineof commercial real estate, which is hitting small and regional banks hard because they took on more development loans, and because they keep those loans on their books. Usually, after a subdivision begins to be hit by foreclosures, the strip malls and big box stores built nearby start to fail, too. The report is further evidence of that downward spiral. So are an increasing number of regional banks on the problem listsof regulators.
To make it worse, Calculated Risk says that the report came out even before Starbucks announced plans to close600 stores. Think how many malls will have empty storefronts where a Starbucks once stood.
Said Calculated Risk: “The CRE bust is here.”
Hajra Shannon
Reviewer
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