Experts warn of serious danger in commercial real estate

 

Billionaire investor Howard Marks and hedge fund titan Paul Marshall warned that commercial real estate could face a crisis soon.  Marks cautioned that a wave of mortgage defaults could add stress to the U.S. banking sector.  Marshall, who runs the hedge fund Marshall Wace, wrote in a letter to investors that the collapse of Silicon Valley Bank had pushed lenders into self-preservation mode.  He pointed out that commercial real estate is particularly under strain from tighter financing and rent pressure.  According to co-founder of Oaktree Capital Management, Howard Marks, the likelihood of seeing mortgage defaults in the headlines is high, contributing to the stress on the U.S. banking sector.  However, he assured that mortgage defaults do not signal the end of the story and will likely lead to renegotiation between lenders and landlords.