The TreppWire Podcast: A Commercial Real Estate Show 270. The Carry Trade Selloff, Regional vs. Superregional Mall Distress, & Appraisal Reduction Trends
Aug 9, 2024
Recent economic shifts have sparked discussions on tightening lending standards and their potential impact on commercial real estate. The contrast between regional and superregional mall distress reveals interesting consumer behavior trends. Delving into office valuations, the conversation highlights how restructured leases and market pressures are reshaping expectations. Additionally, the influence of the Japanese yen carry trade on market dynamics adds layers to current investment strategies. It's a fascinating look into the evolving landscape of retail and office properties.
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Market Volatility
- The US stocks experienced their largest drop since 2022, while Japanese stocks had their worst day since 1987.
- Investment-grade bonds, junk-rated debt, and leveraged loans all declined on Monday.
CRE Market Concerns
- A key concern for the commercial real estate (CRE) market is the jobs report, particularly the impact of the Japanese yen carry trade.
- The carry trade, involving borrowing yen at low rates and investing in US equities, unwound due to market shifts.
Recession Indicator
- The SAHM rule, a recession indicator, has been triggered by the recent rise in the unemployment rate.
- However, interpreting economic data is challenging in the current environment, according to Claudia Sahm herself.