Part 5/10:
The Commercial Real Estate Crisis: An Underwater Iceberg
One of the most significant threats to the banking system detailed in the report is the slow-motion crisis brewing within commercial real estate. As building owners struggle with high borrowing costs, vacancy rates in office spaces soar, and demand wanes, many borrowers face a wave of loan maturities beginning in 2024. These loans, often not due for repayment until later years, could force banks into distressed sales at significant discounts, resulting in heavy losses.