The next economic crisis: Empty retail space
There's also the fear that directing significant relief to the industry would be seen as a “handout to the president’s friends” since Donald Trump made his fortune in commercial real estate, said one lobbyist frustrated with the lack of traction the issue is getting with policymakers.
“Sometimes people forget the depth and breadth of what commercial real estate is,” said Mike Flood, senior vice president of commercial and multifamily policy at the Mortgage Bankers Association. “What’s at risk here is both the ability for people to stay in their apartments and the ability for people to go to their jobs. So unless there’s a stimulus, there’s a lot less to go back to once we get back to normal times.”
A major problem is no one knows how long the drop in commercial real estate will last. Business travel isn’t expected to pick back up for at least a year, so hotels are being hammered. And while office buildings have not yet felt the brunt of the downturn — offices tend to have long leases — that will change as many companies rethink the way they’ll operate as work from home becomes the norm.
The number of commercial loans that have been packaged into securities going into “special servicing” — where distressed loans are transferred to a new manager hired by bondholders to negotiate a payment plan on their behalf — has steadily increased since March.
And it has become clear that the virus will continue to cut into revenue for some ...
More on: www.politico.com