Private Commercial Real Estate: How And When The Market's Next Time Bomb Goes Off

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by Tyler Durden
Monday, Jun 26, 2023 - 05:25 PM

At the start of March, just before the small and regional bank falling dominoes started to fall in earnest resulting in the biggest US bank crisis since Lehman and forcing the Fed to add another liquidity-injecting tool (the BTFP) to its alphabet-soup arsenal meant to keep stocks elevated, we correctly said that the easiest way to bet on the coming commercial real-estate devastation was via such public market instruments such as REITs such as VNO (which is down 20% since) and CMBX 15 BBB- which has also tumbled.

But what about private real estate markets, and just when does the CRE bomb really go off - a question question for those curious when the trillions in mispriced CRE loans will drag down the rest of the banking sector?

For the answers to those questions, we recently read a recent tour de force note by DB's Like Templeman (full must read report available to pro subscribers), who does a terrific job at rounding out the research on the commercial real estate space, while previewing the sequence of (scary) events to come.