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US Commercial Property - Echoes Of The Crisis

Published 05/29/2017, 12:16 AM
Updated 07/09/2023, 06:31 AM

In this video we look at a couple of charts on US Commercial Real Estate and how the risks appear to be rising. The charts in the discussion are from a previous edition of the Weekly Macro Themes report. The main takeaways from the video are that US commercial property has had a very strong run on the back of the QE and low interest rates, low yield environment that has seen significant interest in real estate assets from income oriented investors. The economic fundamentals have for the most part also been supportive for commercial property too in that rental demand has risen, particularly for prime office. But as we discuss in the video, in real terms, property prices look stretched vs the long term average and have risen to pre-crisis levels. On a similar note, credit conditions have been deteriorating according to Fed surveys of the banking industry. So, as discussed in the video, commercial real estate is something that needs to feature highly on the risk radar.

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