Is the worst commercial real estate in U.S. in half a century, a sign of a crash?
The U.S. commercial real estate market is experiencing its worst in half a century, and it seems to be on the edge of a cliff. Since the Fed raised interest rates in March 2022, commercial real estate has grown by a staggering 11%. In such a weak commercial real estate environment, the U.S. banking system is also walking on thin ice and facing tremendous pressure.
According to data reports, the total amount of U.S. commercial real estate loans due will exceed $1 trillion, and by 2027, this number will soar to 2$2 trillion. If lending rates continue to rise, it will undoubtedly be like a boulder crushing the US commercial real estate market. The impact of the pandemic and the rise of remote work have had a huge impact on U.S. commercial real estate. Cushman & Wakefield's research found that about one-fifth of all office buildings in the U.S. were vacant at the end of last year, with large cities like Los Angeles and Houston having a 25% vacancy rate. In a recent blog post, the International Monetary Organization noted that the U.S. commercial real estate market is experiencing its worst in half a century. Will the market crash? No one knows the answer, but we can clearly see that the future of the U.S. commercial real estate market is uncertain. Let's focus on the next step in this market and see if we can find a glimmer of life. February** Dynamic Incentive Program