How low can the CRE market go?

In the span of a week, reports from two investment managers highlighted the current market uncertainty — and the variance of potential outcomes — surrounding U.S. commercial real estate.

The big concern is that $1.2 trillion of commercial real estate debt is set to mature in 2023 and 2024. And with rising interest rates, tightening lending standards and reduced capital availability, a wave of loan defaults could be on the horizon. In addition, there’s the fear such defaults could cause a domino effect, bringing down local and regional banks that hold such mortgages.

A report from UBS Global Wealth Management downplays the scenario of impending “doom and gloom”, while a report from Morgan Stanley Wealth Management states the commercial real estate sector is fac