In a research note, JPMorgan analysts said Europe's banks are safer than their U.S. counterparts from problems in the commercial real estate markets.
Several experts have warned that commercial real estate would be the next domino to fall due to uncertainty in the financial sector.
The research note said, "fundamentally, we believe that any contagion from U.S. banks or U.S. CRE onto European peers is not justified, given different sector dynamics."
- Compared to the U.S., Europe has higher office vacancy rates and negligible rental growth.
- One reason for JPMorgan's positive outlook on European commercial real estate was the willingness of banks to continue providing finance to the sector.
- Capital Economist's analysts have estimated that U.S. commercial property will see a further 18%-20% decline after falling 4%-5% from its peak in mid-2022.
