Commercial Real Estate Having More Than Just Money Issues

Commercial real estate investors may feel the trepidation of an impending economic downturn.

Lenders anticipate an increase in bad loans within their portfolios, potentially impacting their capacity to provide financing in a tight lending environment. Institutional estimates of how many bad loans exist continue to rise quarter-over-quarter.

Blackstone Group's commercial mortgage unit raised its forecast from $125 million at year-end 2021 to $326 million the prior year. As a result, bank losses on loans rose 25% during that time, from $289 million to $365 million.

There are other banking concerns as well. For example, what will become of Signature Bank's commercial real-estate loans after NYCB decides not to purchase them following its collapse? NYCB was believed to be the perfect buyer for these loans due to being the largest lending institution in rent-stabilized markets. However, people familiar with the market believe no other institutional investment firm will step in and leave private companies to fill any voids.

Take the Real Estate Losses, Accept them, and Evolve.

In Chicago's real estate community, temperatures have just turned colder with Brandon Johnson's narrow victory against Paul Vallas in the mayoral runoff. This was not the outcome many expected; many in this field supported Vallas with their votes and big money backing him.

Johnson has proposed raising Chicago's real estate transfer tax from 1.9 percent to 1.9 percent for each property sold for less than one million dollars.

However, it only took a few days for the market to turn around as numerous prominent names, such as Paul Tsakiris, Curt Bailey, David Goss, and Michael Mini, extended their hand in friendship to the mayors-elect.

Finally, the Reuben brothers prevailed. After a year and a half of legal disputes and multiple delays, Michael Rosenfeld's $2.5 billion Century Plaza development in Los Angeles has ended.

David and Simon Reuben from the U.K. own their first property in Los Angeles - a 400-key hotel with 63 units connected to two condominium towers.

Several Real Estate Brokerages ARE Busted

In the tri-state region, a tenant watchdog organization filed a discrimination case against 12 Long Island brokerages -- Berkshire Hathaway HomeServices, Laffey International Realty, and Coldwell Banker American Homes (formerly Century 21 American Homes) - alleging they failed to rent apartments to applicants posing as tenants with Section 8 housing vouchers.

"Supreme" Ethics Violation

ProPublica recently exposed an explosive story in Texas that revealed how billionaire Harlan Crow, son of real estate magnate Trammell Crow, has been lavishly gifting gift cards to Supreme Court Justice Clarence Thomas for years without disclosing any details as required by law.

Thomas and his wife, right-wing militant Ginni Thomas Thomas, have traveled around the world every year on Crow's mega-yacht or private plane to destinations such as Indonesia, New Zealand, Greece, islands of California, and an exclusive enclave within the Adirondack Mountains, staying at luxury estates and resorts and receiving top-of-the-line lodgings.

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