THE BOTTOM LINE UP FRONT
Cascading effects of the commercial real estate (CRE) sector's downturn is rippling across the global banking system, with potential implications far beyond the initial losses reported by banks heavily exposed to this sector.
It should be noted, however, that much of the issue stems from a sub-set of CRE (predominantly east/west coast rent-controlled multi family and office space). Industrial, cold storage, warehouses, self-storage, affordable housing and other categories are performing normally, with data centers and battery storage “booming,” according to an exchange this week with Ehren Stanhope, a US-based Chief Investment Strategist at O'Shaughnessy Asset Management
Still, the potential for sector-specific shocks to precipitate wider economic disruptions must be considered.
