Commercial Real Estate Delinquency Skyrockets 140% in Six Months. 17% of all US office stock Can't Handle Maturing loans. OMG
Commercial Real Estate Delinquency Skyrockets 140% in Six Months. 17% of all US office stock Can't Handle Maturing loans. OMG
Silver: The Most Undervalued Asset for Economic Crisis Protection
The majority of commercial real estate loans are adjustable-rate loans.
Within the commercial real estate sector, a foreboding scenario has emerged, characterized by mounting debt, escalating interest rates, cautious lending practices, and a marked decrease in activity within the office space and leasing markets, all kicked off by the Covid war and remote work models that save companies billions per year in rent.
Really, except for retail (getting killed by Amazon) and healthcare, few businesses feel they need office space.
Pixy started looking into this ticking time bomb—a staggering $1.7 trillion in commercial real estate debt is set to mature by the close of 2025.
This impending financial challenge looms heavily over metropolitan areas, posing difficulties related to refinancing and the intricacies of debt linked to commercial mortgage-backed securities (CMBS) loan portfolios. An extensive analysis by Bloomberg and The National Observer further accentuates the uncertainties.
Predictably, the prominent gateway markets, such as New York, Los Angeles, Miami, San Francisco, and Las Vegas, find themselves at the forefront of this impending financial turmoil, with substantial amounts of CMBS debt set to mature over the next 18 months.
Our investigation delves into various facets of commercial real estate, encompassing properties funded through CMBS debt, those meeting their financial obligations, and those labeled distressed by loan servicers.
Among the distressed loans, which include watchlisted loans, those in special servicing, delinquent, in foreclosure, bankrupt, or matured and nonperforming, a discernible pattern emerges.
New York, in particular, stands out as a hotspot for distress, hosting 149 distressed loans
New York leads the list with approximately $39.8 billion, followed by Los Angeles ($17.9 billion), Miami ($12.6 billion), San Francisco ($11.4 billion), and Las Vegas (nearly $10.6 billion).
TOP CMBS DEBT MARKETS
Markets carrying the highest loan balance for CMBS debt set to mature by Dec. 31, 2024
The CMBS market offers only a partial view into the broader landscape of financial distress and maturing loans within metropolitan areas.
The impending wave of maturing loans presents a formidable challenge for property owners navigating the complexities of refinancing and asset sales. This challenge is exacerbated by a lack of interest from lenders, particularly in the office space segment.
As loan maturities draw near, what do you think will happen? Yup, lenders will not be able to handle this stress, setting off the dominos.
In 2007, the parasitic class blamed the GFC for issuing loans to people with questionable (partially valid) credit. Still, the main problem was the overarching presence of our debt-based economy (war-based).
The GFC was allegedly set off by residential stress in 2008, but this time around, it will be commercial. Plus, there is much more debt in the system, so the likely remedy will be some excuse to unveil the CBDC.
The CMBS office delinquency rate has substantially increased recently, rising from 1.86% at the start of the year to 4.5% in June.
An analysis by CoStar reveals that over the next three years, more than 9,500 office buildings, constituting 17% of all U.S. office stock, will confront maturing loans.
Here is the Good News
There are over 1.5 trillion dollars on the wrong side of this lopsided equation, and they are the stakeholders in assets such as commercial real estate that float on a sea of debt.
Silver is the opposite of “floating on a sea of debt” precisely because it (along with gold) is the only asset that is not simultaneously someone else's liability. That is why we say Silver has no COUNTERPARTY RISK.
Physical silver is a smart play but perhaps a too-conservative investment strategy. We are experiencing numerous unfortunate events leading up to a massive Economic Crisis. Yes, it is wise to stack physical silver, but a better payout is identifying silver that is undervalued in the ground. Why would you want to invest in a silver miner delivering the silver to a market that isn't appreciating the value?
What we love about Summa Silver is their silver discoveries in Nevada and New Mexico, which are high-grade and in some of the safest jurisdictions.
This week, we found more smoking guns showing the monstrous silver supply deficit relative to demand. We will publish these as quickly as we can type and show you the facts so you can judge for yourself.
Many will agree with our thesis that Summa Silver's ounces in the ground could be significantly undervalued (as our macro-financial environment crashes all around us), setting up the broader conditions for silver price discovery (skyrocketing) because of our looming Economic Crisis.
During the economic crisis, your silver is safe in a vault under the ground, protected by a great team of geologists and top-in-class management.
Summa Silver (TSXV: SSVR) (OTCQX: SSVRF) (FSE: 48X) High Grade Silver in USA
Disclaimer / Disclosure
Information contained herein has been obtained from sources believed to be reliable, but there is no guarantee as to completeness or accuracy. Because individual investment objectives vary, this Summary should not be construed as advice to meet the particular needs of the reader. Any opinions expressed herein are statements of our judgment as of this date and are subject to change without notice. Any action taken as a result of reading this independent market research is solely the responsibility of the reader.
The Pickaxe & MineralWEALTH is not and does not profess to be a professional investment advisor, and strongly encourages all readers to consult with their own personal financial advisors, attorneys, and accountants before making any investment decision. The Pickaxe & MineralWEALTH and/or independent consultants or members of their families may have a position in the securities mentioned. Mr. Little does consult on a paid basis both with private investors and various companies. Investing and speculation are inherently risky and should not be undertaken without professional advice. By your act of reading this independent market research letter, you fully and explicitly agree that The Pickaxe & MineralWEALTH will not be held liable or responsible for any decisions you make regarding any information discussed herein.