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close video Commercial real estate market will worsen if economy slows: Jeff Greene

Real estate entrepreneur Jeff Greene addresses fears of commercial real estate collapse on ‘The Claman Countdown.’

The threat of a commercial real estate market crash is hanging over the already fragile U.S. economy. 

About $1.5 trillion in commercial mortgage debt is due by the end of 2025, but steeper borrowing costs, coupled with tighter credit conditions and a decline in property values brought on by remote work, have increased the risk of default. 

Fitch Ratings already estimated that 35% — or $5.8 billion — of pooled securities commercial mortgages coming due between April and December 2023 will not be able to be refinanced. 

"Commercial real estate is melting down fast," Tesla CEO Elon Musk said in a recent tweet. "Home values next."

WORLD BANK WARNS GLOBAL ECONOMY TO SLOW SHARPLY AMID HIGHER INTEREST RATES

The Amazon HQ2 Met Park campus in Arlington, Va., April 3, 2023. (Nathan Howard/Bloomberg via Getty Images / Getty Images)

Office and retail property valuations could ultimately plummet as much as 40% from peak to trough this year as higher interest rates make it harder for investors to refinance trillions in looming debt, according to Lisa Shalett, chief investment officer for Morgan Stanley Wealth Management.

"MS & Co. analysts forecast a peak-to-trough CRE price decline of as much as 40%, worse than in the Great Financial Crisis," Shalett wrote in a weekly investment note. "More than 50% of the $2.9 trillion in commercial mortgages will need to be renegotiated in the next 24 months when new lending rates are likely to be up by 350 to 450 basis points."

STOCK MARKET RALLY COULD BE DERAILED BY AN EARNINGS SLUMP, MORGAN STANLEY WARNS

Complicating the matter is the fact that small and regional banks are the biggest source of credit to the $20 trillion commercial real estate market, holding about 80% of the sector's outstanding debt. Regional banks were just at the epicenter of the upheaval within the financial sector, and there are concerns that the turmoil could make lending standards drastically more restrictive.

Jerome Powell, chairman of the U.S. Federal Reserve, speaks during a news conference after a Federal Open Market Committee meeting in Washington, D.C., March 22, 2023. (Al Drago/Bloomberg via Getty Images / Getty Images)

During a credit crunch, banks significantly raise their lending standards, making it difficult for businesses or households to get loans. Borrowers may have to agree to more stringent terms like high interest rates as banks try to reduce the financial risk on their end.

Banks were already tightening lending standards before the crisis within the industry began. A quarterly survey of loan officers published by the Fed showed that a growing number of banks tightened lending standards and saw a sharp slowdown in demand during the final three months of 2022.

BANKING CRISIS THREATENS TO IGNITE CREDIT CRUNCH OF US HOUSEHOLDS: WHAT TO KNOW

"Refinancing risks are front and center" for commercial property owners, a separate Morgan Stanley note said. "The maturity wall here is front-loaded. So are the associated risks."

Even before the collapse of Silicon Valley Bank and Signature Bank in early March, the commercial real estate market was struggling with a number of challenges, including higher interest rates and waning demand for office space as more companies allow employees to work from home.

Pedestrians walk by a First Republic Bank April 26, 2023, in San Francisco. (Justin Sullivan/Getty Images / Getty Images)

"Commercial real estate, already facing headwinds from a shift to hybrid/remote work, has to refinance more than half of its mortgage debt in the next two years," Shalett wrote in a weekly report published last month.

The Federal Reserve has raised interest rates 10 times over the past year from near zero to around 5%. Policymakers have indicated that another rate hike could be on the table this year amid signs of underlying inflationary pressures.

Still, others are less pessimistic about the future of the commercial real estate market. Solita Marcelli, UBS Global Wealth Management chief investment officer of Americas, said the headlines regarding office space "are worse than reality."

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"An expected credit crunch on the back of rising cost of funding for banks may further compound its troubles," Marcelli said in a note. "We don’t believe a repeat of the 2008 liquidity crisis is likely — where capital markets essentially closed for financing.

"In our view, the health of the overall banking system and market liquidity conditions are substantially better than they were during the [Great Financial Crisis]."

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Science

Ghostly Neutrinos May Hold the Answer to Why Matter Exists in Our Universe

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In a breakthrough study, scientists merged data from Japan’s T2K and the U.S. NOvA neutrino experiments to explore why matter exists in the universe. The findings improve measurements of neutrino behavior and may help reveal whether these particles break symmetry with antimatter, offering vital clues to how the universe survived after the Big Bang.

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World

Thousands targeted in ‘killing fields’ around Sudanese city in paramilitary group’s hands

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Thousands targeted in 'killing fields' around Sudanese city in paramilitary group's hands

Thousands who fled a key frontline city in Sudan’s war as it fell to paramilitaries were targeted in killing fields around it by the group, after the military’s top brass secured their own safe passage.

Warning: Some readers may find content in this article distressing.

More than 60,000 people are still missing and humanitarians fear that Al Fashir’s remaining 200,000 residents are being held hostage by Rapid Support Forces (RSF) fighters.

In our investigation with Sudan War Monitor and Lighthouse Reports, we can reveal the harrowing fate of civilians and soldiers who fled the city in the hours after senior commanders and officers left the infantry division.

Some 70,000 people have escaped Al Fashir since it was captured on 26 October, according to the DTM matrix of the International Organisation for Migration (IOM), but fewer than 10,000 people are accounted for in the nearest safe displacement zones.

In an effort to track down the missing, we analysed dozens of videos and followed crowds of civilians on their way out.

In this first video, we see a group, and two men – the first with a yellow hoodie and black jacket walking beside a dirt berm along with women and children.

An image from the first video
Image:
An image from the first video

In a later video, we see a crowd of captives that includes the two men – in the same yellow hoodie and red turban.

A video of men sitting on the ground under RSF armed guard shows the women walking through freely, showing they had been separated.

An image from the second video
Image:
An image from the second video

In another video, we see the man in a red turban in a queue of men who start to run as RSF fighters chase and beat them.

An image from the third video
Image:
An image from the third video

A source on the ground told us that this single group had around 2,000 captives and only 200 of them arrived at the nearest displacement shelter in Tawila, around 45 miles from Al Fashir.

We geolocated one of the videos of the group walking approximately 5km (three miles) from the nearby town of Geurnei.

We geolocated one of the videos of the group walking three miles from the nearby town of Geurnei. Pic: Copernicus
Image:
We geolocated one of the videos of the group walking three miles from the nearby town of Geurnei. Pic: Copernicus

There, hundreds were rounded up in school buildings.

‘They would execute people in front of us’

The families of doctors held there told Sky News the RSF asked them to pay ransoms to secure their release.

A man who survived captivity in Geurnei with his wife told us he was held with around 300-400 families after being robbed and harassed on his way out of Al Fashir.

“We got to the school and they caught up with us. They starting targeting people – elderly and young – and took them to be detained,” said Abdelhamid.

“They would select people and execute them in front of us and then say – ‘bury your brother’ – and we would cover them with soil. I saw them kill 18 people with my own eyes and then people had to bury them with their bare hands.”

Satellite images from 30 October show mounds of dirt that appear to be new graves added to an existing cemetery, near school buildings in Geurnei.

Read more:
UAE is ‘main backer’ behind Sudan war – intelligence officer

Tens of thousands killed in two days in Sudan city, analysts believe

Others were executed in the fields outside of Al Fashir.

In a video shared on social media, a vehicle is shown pursuing civilians in the countryside.

The driver films as two fighters, one in an RSF patch, stop an unarmed man.

One asks what the man is carrying, and shoots him at point-blank range.

The car continues forward, accelerating towards and narrowly avoiding two unarmed men.

He asks one man if he is carrying anything and says he is “acting as if you are Arab”.

After the driver says “kill them all”, the camera turns back to the man, who appears to have been shot.

The driver then urges those with him to hurry to catch up with those ahead.

This brutality comes after the RSF encircled, starved and shelled Al Fashir for 18 months in their battle with the military for the last regional capital in Darfur under state control.

Several high-level sources told us that top state commanders, officers and political leaders made arrangements for their own safe passage in over 100 vehicles, including some armoured cars, before the 6th infantry division was captured by the RSF in the morning hours of 26 October.

The battle for Al Fashir – and Sudan

Earlier this year, Al Fashir was being suffocated to death by the paramilitary Rapid Support Forces (RSF) as they pushed to claim full control of the Darfur region as a base for their parallel government, after the military recaptured the capital Khartoum and other key sites in central Sudan.

On Monday, famine conditions were confirmed in Al Fashir and Kadugli, another besieged city in Sudan’s south, by the UN-backed Integrated Food Security Phase Classification (IPC).

Inside Al Fashir, thousands were bombarded by almost daily shelling from surrounding RSF troops.

The RSF physically reinforced their siege with a berm – a raised earth mound. First spotted by Yale Humanitarian Research Lab, the berm is visible from space.

The Sudan war started in April 2023, when long-simmering tensions between the Sudanese army and the RSF broke out in Khartoum.

The US special envoy to Sudan estimates that 150,000 have been killed, but the exact figure is unknown. Close to 12 million people have been displaced.

After 18 months of surviving forced starvation and shelling, the regional capital and symbolic battleground of Al Fashir fell to the RSF at the end of October.

What does the head of the SAF say?

The commander in chief of the Sudanese Armed Forces (SAF) Abdel Fattah Al Burhan has said the withdrawal was to spare the city from further destruction, indiscriminate shelling and drone attacks.

In response to our findings, he told Sky News: “The decision to withdraw was unanimous among the armed forces, regular forces, and the joint security committee.

“The withdrawal began with an attack by drones on forces blocking one of the crossings, destroying their positions.

“Later, the forces fought until they broke through the barrier and moved to a location outside the city.

“During the withdrawal, the forces lost more than 300 martyrs, and most of their vehicles were destroyed. They remain besieged.

“They did not leave soldiers behind. Those who remained were tasked with securing the withdrawal, and they performed their duty as required.”

But instead of a co-ordinated withdrawal, a soldier left behind describes an abandoned command.

‘They completely abandoned us’

“The division commander had left the garrison. They completely abandoned us and we were suddenly surrounded 26 to 1 in the morning hours. Suddenly, everything collapsed on us in the defence. We asked what was going on and were told everyone fled,” he said.

“Shortly after, bombs started falling on us. Brigadier General Adam, the artillery commander, refused to withdraw, saying that the division commander had already withdrawn without informing him of the order. The brigadier general, six colonels, and a naval colonel were also captured.”

Testimony from a civilian who fled that morning paints a picture of chaos.

He said: “There was no co-ordination over withdrawal, and it seemed to be a surprise to the remaining fighters on the frontline. Some were leaving the city and others were fighting battles with the RSF.”

As the RSF entered Al Fashir, he told us civilians were massacred.

“The streets were covered in bodies. I saw it for myself. The RSF came into the city and butchered everyone they found. They did not discern between a child, a civilian or the elderly – they executed everyone, a full genocide.”

High-resolution satellite imagery captured by Vantor shows burnt vehicles grouped together south of the berm the RSF built to besiege Al Fashir.

A video we located at the site shows dozens of bodies, in fatigues and civilian clothing, lying lifeless on the ground by burning cars.

Mounting concern over 200,000 people

Fears are mounting over the fate of around 200,000 people left in Al Fashir.

A top RSF commander with knowledge of the operations in the city told us that at least 7,000 people have been killed in Al Fashir in the first five days of capture.

He said RSF fighters systemically targeted civilians from non-Arab tribes and killed groups of 300 to 400 people in some areas. Civilian sources close to the RSF corroborated his death toll, which we cannot independently verify on the ground.

Al Fashir is in a complete telecommunications blackout.

The United Nations Office for the Coordination of Humanitarian Affairs (UNOCHA) in Sudan has shared in a post on X that their “Humanitarian partners in Sudan are being blocked from reaching A Fashir, North Darfur.

“Civilians are trapped inside, their condition unknown. Aid workers are ready to deliver life-saving support. Access needs to be granted now, in line with international humanitarian law.”

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The RSF has circulated videos on its social media channels showing trucks delivering aid to Al Fashir’s emaciated civilians.

This comes after months of volunteers and aid workers being killed by RSF fighters while trying to bring in relief during their 18-month siege of enforced starvation and relentless shelling.

What does the RSF say?

The spokesperson for the RSF’s political administration TASIS, Dr Alaa Nugud, told Sky News that the RSF there is a big fake media campaign prepared for the “Al Fashir liberation” and denounced the death toll of at least 7,000, shared by one of their top commanders, as “totally rubbish”.

In response to our report, he said: “Never happened that TASIS forces or any of its constituents killed civilians based on ethnic background, on the other hand this is what was done by SAF and the Muslim brotherhood National Congress Party doctrine during their 39 years of rule.

“SAF’s military intelligence was igniting these ethnic clashes throughout years they used religion to flame war in south Sudan and used racism and ethnicity to ignite war in Darfur.”

He added that “RSF and TASIS forces evacuated more than 800,000 civilians outside Al Fashir”.

“Could they not provide or grant safe passage to civilians? The reality is that the insurance of the continuation of the war and spoiling of all peace platforms… the continuation of this war is the main cause of all atrocities.

“The atrocities are consequences of this war, not the cause of the war. So to stop all these atrocities we have to stop the war and this is not there in SAF agenda.”

The RSF is accused of committing war crimes and crimes against humanity across Sudan since the war started in April 2023.

The Biden administration accused the RSF of committing genocide in Darfur in 2024, two decades after the group was first accused of genocide in the region as the Janjaweed.

Our previous reporting on Sky News has supported allegations that the UAE militarily supports the RSF, though the country officially denies it.

Additional reporting by Mohamed Zakarea, Sam Doak, Annoa Abekah-Mensah, Aziz Al Nour, Julia Steers, Jack Sapoch, and Klaas van Dijken.

This story was a joint Sky News data and forensics investigation with Sudan War Monitor and Lighthouse Reports.

The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open source information. Through multimedia storytelling we aim to better explain the world while also showing how our journalism is done.

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Technology

Ether falls 7% following a multimillion dollar hack of a decentralized finance protocol

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Ether falls 7% following a multimillion dollar hack of a decentralized finance protocol

Representation of Ethereum, with its native cryptocurrency ether.

Dado Ruvic | Reuters

Ether fell as much as 9% on Monday, slipping below its critical $3,600 support level, shortly after a multimillion dollar hack affected a protocol on the token’s native network. 

The cryptocurrency, which is issued on Ethereum, was last down 6.6% at around $3,600, CoinMetrics data shows. That’s roughly 25% off its high of $4,885 hit on August 22

The coin’s tumble came after Ethereum-based decentralized finance protocol Balancer on Monday lost possibly more than $100 million in a hack. The exploit marks the latest in a series of bearish events that have put digital assets investors on tenterhooks over the past few weeks.

In mid-October, U.S. President Donald Trump announced “massive” tariffs on China over its restriction of rare earth exports, kicking off investors’ flight from crypto to risk-off assets such as gold. And although the president later walked back that threat, his comments sparked a sell-off that triggered cascading liquidations of highly leveraged digital asset positions

Last week, Federal Reserve Chair Jerome Powell cautioned investors about expecting future rate cuts, adding to existing bearish market sentiment.     

“These events have put investors on uneasy footing as we roll into November,” Juan Leon, senior investment strategist at Bitwise, told CNBC. “Macro volatility notwithstanding, this October’s drawdown appears to have been a healthy, albeit sharp, de-leveraging event that flushed speculative excess from the market.”

Some stocks linked to digital assets are also coming under pressure. Coinbase shares were down nearly 4%, while Bitcoin treasury firm Strategy edged down more than 1%.   

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