The TreppWire Podcast: A Commercial Real Estate Show

287. Hope is Not a Strategy: CRE Extend & Pretend, Home Mortgage Rates, & Hot Hitting Stories

Nov 1, 2024

This discussion dives into the latest economic data, spotlighting mixed results in GDP and consumer spending. The rising home mortgage rates heavily impact homebuilders, prompting strategic shifts. An insightful comparison reveals LA's commercial real estate thrives post-Dodgers' World Series win. The 'extend and pretend' strategy emerges in managing troubled loans, with both risks and potential restructurings. Lastly, trends in industrial real estate transactions highlight vibrant market activity across various states.

47:52

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Quick takeaways

The recent mixed economic indicators point to a cautious growth trajectory, with falling job openings and Treasury yields reflecting a softening labor market.

Home mortgage rates have surged above 7%, creating challenges for homebuilders and potentially constraining sales as the fourth quarter approaches.

The commercial real estate market faces significant distress, particularly in office space, driven by reduced rental values and increased loan defaults.

Deep dives

Economic Data Overview

Recent economic data presents a mixed picture for the economy, with key indicators such as GDP, jobs, consumer spending, and home sales reflecting varying trends. The GDP growth rate came in at 1.8%, slightly below expectations, while new job openings dropped to 7.443 million, significantly lower than the anticipated 7.98 million. This decline in job openings may signal a softening labor market, causing Treasury yields to decrease. Overall, while household spending remains reasonably healthy, the economy's performance appears to be on a steady but cautious path.

Intro

6min

Navigating Mortgage Rates: Impact on Homebuilders and Market Dynamics

4min

Comparative Analysis of LA and NYC Commercial Real Estate Amid World Series Triumph

2min

Navigating Troubled Loans in Commercial Real Estate

27min

Recent Trends in Industrial Real Estate Transactions

3min

Recent Developments and Community Engagement in Commercial Real Estate

6min

In this week's episode of The TreppWire Podcast, we cover the recent mixed bag of GDP, consumer spending, and homes sales data. We also discuss the hot topics of the week, including the Fed staff report on “extend-and-pretend” and the LA Market with Dodgers winning the World Series. We wrap up the episode with more office loans being transferred to special servicing, but end on some positive credit stories. Tune in now.

Episode Notes:

- Economic Update (0:51)

- Average Home Mortgage Rate (5:08)

- Look into the LA Market (9:09)

- "Extend-and-Pretend" Fed staff Report (11:50)

- Brookfield Bank of America Plaza Loan (19:20)

- Value of Office Property Slashed by 70% (22:17)

- NY-based REIT Acquiring Retail Space (28:37)

- Lodging Credit Stories (35:23)

- Recent Industrial Sales (39:10)

- Programming Notes (42:00)

- Shoutouts (43:39)

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Questions or comments? Contact us at podcast@trepp.com.

Follow Trepp:
Twitter: www.twitter.com/TreppWire
LinkedIn: www.linkedin.com/company/trepp

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