'It's going to be ugly': This CEO is issuing a dire warning about US real estate...
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The commercial real estate market is tumbling toward a crash that could be as devastating as the 2008-09 crisis, according to the CEO of a real estate investment firm.
Patrick Carroll, founder and CEO of CARROLL, sounded the alarm about the state of the U.S. commercial real estate market in a recent interview with CNBC.
“The party’s over, unfortunately,” he said. “The office market’s going to be destroyed, hotels are going to be destroyed — it’s going to be ugly.”
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A dire warning for commercial real estate
Carroll is not the first — and certainly won’t be the last — to ring the warning bell for the commercial real estate sector.
Since the collapse of Silicon Valley Bank in March, experts have raised concerns about the mega $1.5 trillion wall of debt looming for U.S. commercial properties.
That mortgage debt — which is held mostly by small- and medium-sized banks — comes due for repayment before the end of 2025.
“No lender is willing to lend because they don’t know where interest rates are going,” Carroll told CNBC.
Carroll added offices are experiencing “a double whammy” of misery and he described the sector’s fundamentals as “terrible.”
“After COVID, people worked from home. The work week is now Tuesday to Thursday — so, people are taking less office space, no one wants to lend on it … it’s a disaster,” he said.
Real estate safe haven?
According to Carroll, there is one real estate niche that is riding out this wave: multi-family real estate.
In contrast to commercial real estate, the multi-family market has “strong fundamentals,” says Carroll, whose real estate investment firm manages more than 33,000 multi-family units across nine states.
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