In this Yahoo Finance report from today (3/24/2023), they talk about how the bank crisis is not a good thing for commercial real estate, in general, because that sector has had so many changes and stresses since the pandemic began, The whole work-from-home movement has pulled lots of workers out of offices, and that is after years of the Retail Apocalypse opening up thousands of retail stores, as ecommerce surged in popularity, and then the sharp and quick rise in interest rates.
As someone who has been blogging about a major economic downturn that looked to be coming for about 4 -5 years now (like here), commercial real estate is another area I believe will go through a huge transition phase, as we continue to move out of the remaining Industrial Age institutions and business models, and into Information Age models.
I've written much more on this underlying idea here and here. Whether my working concept, that I call The Big Transition (an extension of Alvin Toffler's concept, TheThird Wave from 1980,) is the best take on things can be argued, but in any case, it appears that there will be major, and massive changes in the uses of commercial real estate in the next 10 years or more. This will be on top of lots of changes that have already take place, like the adaptive reuse of old grocery stores for fitness centers, dead malls for shipping centers and medical offices, and many other ongoing reuses of commercial properties.
More on my Big Picture of how I see the 2020's playing out can be found in my online "book/blog thing," written in 2019-2020 called Welcome to Dystopia: The Future is Now. In it I explain the three theories of other thinkers that I believe best describe where things are going, and my take on, and extension of those ideas into more recent years. In any case the bank crisis is abou tthe last thing the commercial real estate world needed right now. We'll see how things play out.
Just saw another article fromYahoo Finance today (3/24/2023). "Banks are sitting on $1.7 trillion in unrealized losses." Uh... that's not good. The article goes on to say that of the $17 trillion in banks deposits in the U.S., $7 trillion are not covered by FDIC insurance.
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