In case you’ve still got money in a bank, Bloomberg is warning that defaults in commercial real estate loans could “topple” hundreds of U.S. banks
Leaving taxpayers on the hook for trillions in losses.
The note, by senior editor James Crombie, walks us through the festering hellscape that is commercial real estate.
To set the mood, a new study predicts that nearly half of downtown Pittsburgh office space could be vacant in four years. Major cities such as San Francisco are already sporting zombie-apocalypse downtowns, with abandoned office buildings baking in the sun.
So what happened?
The Fed’s yo-yo interest rates first flooded real estate with low rates and cheap money. Which were overbuilt.