Morgan
Stanley Wealth Management's Chief Investment Officer, Lisa Shalett,
wrote in the weekly Global Investment Committee note that commercial
real estate faces a huge hurdle ahead.
Many experts have warned that commercial real estate is currently vulnerable.
- Over
50% of $2.9T in commercial mortgages will be up for renegotiation in
the next two years and will have to deal with interest rates up by 350
to 450 basis points.
- Also, regional banks accounted for 70%-80% of all new loan originations in the past cycle.
- According
to the note, Morgan Stanley analysts forecast a peak-to-trough price
decline of around 40%, worse than in the Great Financial Crisis.
- Separate but related: Billionaire investor Leon Cooperman said
in a CNBC interview that the global banking sector crisis would force
banks to tighten lending standards and boost liquidity, impacting the
commercial real estate market.
