Lending Squeeze: Red Flag For Commercial Real Estate?
Portfolio Pulse from Piero Cingari
A contraction in lending is leading to a rise in defaults across the commercial real estate (CRE) sector and a slowdown in new construction projects. Lenders are cutting back their exposure due to the Federal Reserve’s interest rate hikes. Commercial property construction starts are predicted to fall by 17% in 2023. The total volume of CRE loans held by banks fell in the first two weeks of October. The lending squeeze has affected office owners refinancing maturing loans at higher rates and other commercial borrowers in the apartment building and warehouse sectors. The VanEck Office and Commercial REIT ETF (NYSE:DESK), Vornado Realty Trust (NYSE:VNO), SL Green Realty Corp. (NYSE:SLG), and Boston Properties, Inc. (NYSE:BXP) saw their values tumble in October.
October 31, 2023 | 3:29 pm
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NEGATIVE IMPACT
Boston Properties, Inc. (NYSE:BXP) tumbled 11% over the past month due to the lending squeeze in the commercial real estate sector.
The lending squeeze in the commercial real estate sector has led to a decrease in the value of Boston Properties, Inc. (NYSE:BXP). This is due to the company's exposure to the commercial real estate sector.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
The VanEck Office and Commercial REIT ETF (NYSE:DESK) saw its value tumble 9% in October due to the lending squeeze in the commercial real estate sector.
The lending squeeze in the commercial real estate sector has led to a decrease in the value of the VanEck Office and Commercial REIT ETF (NYSE:DESK). This is due to the ETF's exposure to the commercial real estate sector.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
SL Green Realty Corp. (NYSE:SLG) tumbled 21% over the past month due to the lending squeeze in the commercial real estate sector.
The lending squeeze in the commercial real estate sector has led to a decrease in the value of SL Green Realty Corp. (NYSE:SLG). This is due to the company's exposure to the commercial real estate sector.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
Vornado Realty Trust (NYSE:VNO) tumbled 17% over the past month due to the lending squeeze in the commercial real estate sector.
The lending squeeze in the commercial real estate sector has led to a decrease in the value of Vornado Realty Trust (NYSE:VNO). This is due to the company's exposure to the commercial real estate sector.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100