Motley Fool Money The Other Risk Powell Is Watching
Jul 11, 2024
Asit Sharma, an investment analyst at The Motley Fool with a focus on commercial real estate and smaller banks, joins the discussion. He dives into the current stresses in the commercial real estate market and highlights the challenges smaller banks face with nearly $1 trillion in maturing debt. The conversation shifts to Delta Airlines, addressing financial health amid rising costs. Sharma also analyzes the surprising stock surge of Tesla despite delivery declines and looks at emerging beverage brands shaking up the market.
AI Snips
Chapters
Transcript
Episode notes
Commercial Real Estate Risk
- Jerome Powell acknowledges commercial real estate as a risk, especially for smaller banks.
- Nearly $1 trillion in CRE debt matures this year, with office delinquencies at their highest in a decade.
Small Bank Vulnerability
- Smaller banks with concentrated CRE exposure in one community face higher risks.
- Buyers like Oaktree Capital see this as an opportunity to find bargains in distressed commercial real estate.
Investing in Distressed CRE
- Gather cash, be patient, and evaluate cash flow of CRE-heavy REITs during market downturns.
- Treat this as a high-risk investment side hustle, only investing what you can afford to lose.