Nightmare on Constitution Avenue? Commercial RE Debt Heavily Concentrated In NY, SF, Chicago And LA As Office Vacancy Rate Nears 20%

#bubble, #inflation, #wine, @MetreSteven @JeffSnider_AIP @DiMartinoBooth @bondstrategist @RaoulGMI @LukeGromen @dlacalle_IA @EconguyRosie @profplum99 @SantiagoAuFund @biancoresearch @pboockvar @SriKGlobal, Agency MBS, Bank of England, Bank of Japan, Banking, CMBS, CRE, Credit, ECB, Economy, Existing Home Sales, Fed, Freddie Mac, GDP, Gold, Housing, Inflation, Mortgage, New Home Sales, Oil, Pension, Powell, REITs, Silver, SPX, Treasuries, Treasury, Uncategorized, Wages, Yellen, Yield Curve 1 Minute

Will The Dream Warriors at The Federal Reserve fix this impending disaster? Or will this be a Nightmare on Constitution Avenue, where the mausoleum-like Federal Reserve building are located?

A Blackstone-owned Manhattan office tower with a $308 million mortgage is being marketed at a discounted rate of $150 million, representing a 50% reduction. The special servicer, Midland Loan Services, has enlisted Jones Lang LaSalle Inc. to facilitate the sale of the tower at 1740 Broadway. The bundled debt, included in a commercial mortgage-backed security, is marked with a 50% discount. In April, the tower was appraised at $175 million, a substantial 71% decline from its $605 million valuation in 2014 when the mortgage originated.

To put this into perspective, a new report by the Mortgage Bankers Association data, shows $117 billion in CRE office debt needs to be repaid or refinanced this year. Much of this debt is concentrated in major cities such as Manhattan, San Francisco, Chicago, and Los Angeles.

Compounding (or CONFOUNDING) the problem is the near 20% office vacancy rate.

Here is Fed Chair Jerome Powell who replaced now Treasury Secretary Janet Yellen.

Published by confoundedinterest17

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