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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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India and Pakistan were close to miscalculation either side couldn’t afford

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India and Pakistan were close to miscalculation either side couldn't afford

Both India and Pakistan claimed they didn’t want all-out war, or for things to escalate.

But given that those statements came within hours of airstrikes from either side, it’s easy to understand why the world was sceptical.

Fast forward just a few hours though and a ceasefire has been agreed – with the help of the US, who brokered talks and even announced the deal.

India-Pakistan live: Latest updates as ceasefire agreed

The agreement has sparked celebrations in Pakistan, with people in many cities, including Lahore, taking to the streets. Chants of “Pakistan Zindabad” – “Long Live Pakistan” in English – are ringing out.

But the deal doesn’t undo the events of the past two weeks, which will continue to weigh heavily on the minds of many here.

The military action has been the most significant between the countries in decades and dozens have died on both sides.

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Pakistan fires missiles at India

Just this morning, Pakistan inflicted some serious damage to India’s military sites and New Delhi did not waste time responding with further strikes.

It was a reminder, for many, of the uncertainty of the situation between India and Pakistan.

Read more:
How India and Pakistan’s militaries match up
The story of India and Pakistan’s deadly conflict

A house damaged in overnight Indian shelling, in Shah Kot, in Neelum Vallery. Pic: AP/M.D. Mughal
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A house damaged in Indian shelling, in Shah Kot, in Neelum Vallery. Pic: AP/M.D. Mughal

Representatives from each country will speak again on Monday and even with the strikes halted, for now, the next 48 hours will be a very testing moment.

Both sides have often shown striking strategic restraint. And in the past fortnight, neither has launched a full-scale attack.

But their enmity has been enduring, and even with the agreement in place, it feels a bit complacent to assume India and Pakistan will just walk back from the brink.

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Stanley Cup playoffs daily: Can the Golden Knights rally from down 2-0?

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Stanley Cup playoffs daily: Can the Golden Knights rally from down 2-0?

The second-round series of the 2025 Stanley Cup playoffs have entered the “venue change” stage, where the previous visitors are now playing host.

The Carolina Hurricanes headed back to the Lenovo Center with a 1-1 series against the Washington Capitals, and they’ll pick up hostilities at 6 p.m. ET Saturday. The Edmonton Oilers traveled back to Rogers Place holding a 2-0 lead over the Vegas Golden Knights; Game 3 of that series is 9 p.m. ET Saturday.

What will the series tally be in Caps-Canes when it heads back to D.C. — and will the Knights win at least one in Alberta so they even see a Game 5 back in Las Vegas?

Read on for game previews with statistical insights from ESPN Research, a recap of what went down in Friday’s games and the three stars of Friday from Arda Öcal.

Matchup notes

Washington Capitals at Carolina Hurricanes
Game 3 | 6 p.m. ET | TNT

With the Canes and Capitals tied up 1-1 heading to Raleigh for Games 3 and 4, ESPN BET has Carolina as the -215 series favorite. Washington is +180 to win the series.

Capitals defenseman John Carlson scored a power-play goal in Game 2, his 13th career playoff power-play goal, which breaks a tie with Brian Leetch for third for such goals by an American-born defenseman. He still trails Chris Chelios (14) and Brian Rafalski (17).

For the first time in his postseason career, Tom Wilson reached all of these thresholds: 2 points, 3 shots on goal, 2 hits and 2 blocked shots. His seven points this season is the most he has had in a playoff run since the Cup-winning year of 2018 (15).

The Hurricanes have not held an in-game lead since Game 4 of the first round against the Devils. They won the series in Game 5 in a double-overtime game, then won Game 1 of this series 2-1 in OT after trailing 1-0. Since that lead in Game 4 of the first round, they have trailed for 89:28 and been tied for 117:55.

Among qualified goaltenders this postseason, Frederik Andersen leads by a wide margin in goals-against average (1.55), and is second in save percentage, at .930. The netminder ahead of him in SV%? Washington’s Logan Thompson.

Vegas Golden Knights at Edmonton Oilers
Game 3 | 9 p.m. ET | TNT

Following two wins by the Oilers in Vegas, ESPN BET now lists Edmonton as the -550 favorites to win this series, with the Golden Knights at +380. Edmonton is also the current favorite to win the Cup, at +300, narrowly ahead of the Stars, at +325. Vegas is now +1800, the longest odds of any team remaining in the playoffs.

Leon Draisaitl and Connor McDavid combined to score the game-winning OT goal in Game 2. It was the second OT goal this postseason for Draisaitl, and he is now tied for the most such goals in a single postseason in Oilers history with Esa Tikkanen in 1991.

McDavid is second among playoff scorers with 14 points through eight games, trailing only Mikko Rantanen‘s 15. McDavid’s 1.75 points per game this postseason is ahead of his rate in playoff seasons past (1.58) and well ahead of his rate during last year’s run to the Stanley Cup Final (1.36).

Victor Olofsson had two goals and an assist in a losing effort in Game 2. Both goals were on the power play, and he joins Jack Eichel as the only players in Knights history with multiple power-play goals in a single playoff game.

Speaking of Eichel, he finished with three assists, joining Shea Theodore and William Karlsson as the only players in Knights history with two three-assist playoff games on their résumé.


Öcal’s three stars from Friday

After a rough first round against the Blues, Hellebuyck shut out the Stars in Game 2. He made 21 saves en route to the fourth clean sheet of his postseason career.

Ehlers had his second career multigoal game and added an assist in a big Game 2 effort that tied Winnipeg’s series with Dallas 1-1.

The former Bruin continues to haunt the Maple Leafs, this time with the overtime winner to get the Panthers on the series board at 2-1. It was his fourth career playoff OT goal, and he extended his own NHL record for most consecutive postseasons with a game-winning goal (nine).


Friday’s recaps

Florida Panthers 5, Toronto Maple Leafs 4 (OT)
TOR leads 2-1 | Game 4 Sunday

Toronto entered with a 2-0 series lead and got out to a 2-0 start in the game as well, with goals from Matthew Knies and John Tavares, before Aleksander Barkov drew the Panthers back to within a goal with his third goal of the postseason. Tavares added a power-play tally at 2:52 of the second period on a slick deflection, before the Panthers ripped off two goals in quick succession to tie the score. The first was thanks to Sam Reinhart poking the puck in during a wild scramble in the Leafs’ crease, the second after a superb pass from Sam Bennett to Carter Verhaeghe. Jonah Gadjovich put the home squad up 4-3, but Morgan Rielly tied things up midway through the third. It took until the final five minutes of the first OT, but Brad Marchand came through with another game-winning goal. Full recap.

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Brad Marchand’s OT winner sparks pandemonium from Panthers crowd

Brad Marchand scores a massive overtime goal to deliver the Panthers a 5-4 win over the Maple Leafs.

Winnipeg Jets 4, Dallas Stars 0
Series tied 1-1 | Game 3 Sunday

If this is the kind of goaltending the Jets will now get from Connor Hellebuyck, the Stars (and the rest of the NHL) are in trouble. Hellebuyck stopped all 21 shots sent on the Jets’ goal en route to his fourth career postseason shutout. On the offensive side, Gabriel Vilardi and Nikolaj Ehlers got the party started in the first. Adam Lowry added his fourth goal of the postseason in the second, and that 3-0 lead stood until 16:20 of the third, when Ehlers capped off the festivities with an empty-net goal. Full recap.

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Nikolaj Ehlers rolls in an empty-net goal for Winnipeg

Nikolaj Ehlers scores his second goal of the game to pad the Jets’ lead late in the third period vs. the Stars.

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Leafs’ Stolarz progressing but not close to return

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Leafs' Stolarz progressing but not close to return

FORT LAUDERDALE, Fla. — Maple Leafs goaltender Anthony Stolarz continues to work his way back but doesn’t appear close to a return in Toronto’s second-round Eastern Conference playoff series against the Florida Panthers.

“He’s progressing in the right direction,” Maple Leafs coach Craig Berube said Saturday. “But he has not skated yet [since getting hurt].”

Stolarz was injured during Game 1 on Monday. The goaltender took a puck off his mask and an elbow to the head from Panthers forward Sam Bennett in the second period, exiting shortly after the Bennett hit. Stolarz, who was ill on Toronto’s bench before he left the game, was later transported to a hospital for evaluation.

The veteran was able to rejoin his teammates Tuesday at their facility but did not travel with the Maple Leafs to Florida ahead of Friday’s Game 3.

Joseph Woll took over the starting duties from Stolarz and helped stake Toronto to a 2-0 lead in the best-of-seven series. But Woll struggled in Game 3, recording an .861 save percentage as the Panthers mounted two multigoal comebacks to down the Maple Leafs 5-4 in overtime.

Berube said after the loss that he “thought [Woll] was really good” but that he didn’t love when Panthers fourth-liner Jonah Gadjovich beat the goaltender cleanly from outside the right faceoff circle to give Florida its first lead of the game at 4-3.

Woll also has been adjusting to playing the puck amid Florida’s smothering forecheck.

“They rim a lot of pucks,” Woll said Friday. “I’m just trying to do my best to help us break out.”

Florida hasn’t made it easy on Toronto in that respect. Berube anticipates Woll can learn from Friday’s mistakes and improve, though.

“It’s difficult,” Berube said. “A lot of those rims are up; they’re not on the ice. And that’s designed. If they can get a good lick on it, they’re going to get it on the glass. It’s pretty tough for him to come out and play those. He did get to a lot of them. But they’re coming hard. He’s going to have to move it quick.”

Game 4 of the series is set for Sunday.

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