What is it, who are the players, and why has it been deemed “by far the most serious looming issue?”
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Commercial real estate are real estate like office buildings, retail locations, apartments, hotels, warehouses, etc. Many of those areas are facing major shifts, perhaps permanent ones. Think of all the office space in major cities that’s still sitting 1/2 empty due to COVID shifting remote work. If companies have half their workers in an office at any given day, they’ll start to reduce space and have workers share work spaces. So what happens to owners of office buildings when their tenants need half the space, and demand causes rents to fall? Do they default on their loans? Same for retail spaces, as ecommerce, large chain bankruptcies, etc. lead to more and more retail space vacant and landlords unable to attract new tenants or get the rents they collected when they purchased the building.
And if lenders begin taking back defaulted real estate, how long before they stop lending for new purchases of existing buildings, funding construction of new spaces?
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