Goldman Sachs strategists have gone against the predictions of many experts and said the commercial real estate's threat to financial stability is limited.
Last week, Morgan Stanley forecasted a peak-to-trough price decline of around 40%, worse than in the Great Financial Crisis.
- The
analysts believe apartments, manufacturing plants, warehouses, and
other commercial real estate types are better-capitalized and will not
suffer a crash.
- The Goldman strategists said they expect the
office loan delinquencies to materially increase but is unlikely to lead
to systemic risk in other sub-sectors.
- The healthier
fundamentals of apartments, industrial properties, and other sub-sectors
would likely contain the turmoil of office loan delinquencies.
- Bank of America's investment strategist Michael Hartnett predicted CRE would be the next danger spot in the uncertain U.S. financial sector.
