The commercial real estate market is headed for a severe collapse due in large part to sky-high interest rates and declining property values, according to a survey of investors.
Around two-thirds of those who responded to a Bloomberg News survey said they believe that the commercial real estate market will recover only after a crash.
When asked when they believe the price of office properties will hit bottom, 44% said they expect that to happen in the second half of next year while 22% said it will be in the first six months of 2024, according to Bloomberg News.
Just 6% of the 919 respondents said that prices would bottom out this year while 29% predicted that it would happen in 2025 or beyond.
The Fed has raised interest rates aggressively, which is increasing the cost of financing commercial properties at a time when there is also reduced need for them, which has hit rent levels.
Investors are bracing for a possible crisis triggered by default on $1.5 trillion in debt that is coming due by the end of 2025,.
Some $270 billion in commercial real estate loans held by banks are set to mature in 2023, according to Trepp.
Over the next four years, commercial real estate properties must pay off debt maturities that will peak at $550 billion in 2027, according to analysts at Morgan Stanley.
Earlier this month, a study released by economists from NYU Stern Business School, Columbia Business School and the National Bureau of Economic Research showed that vacancy rates are at 30-year highs in many American cities.
In New York City, the vacancy rate was 22.2% in Q1 of 2023.
Office buildings in New York City — the world’s largest commercial real estate market — have lost $76 billion in value from their most recent sales prices, according to broker JLL.
Blackstone and RXR sold the office building at 1330 Avenue of the Americas for $320 million — a third less than the listing price in 2006.
Real estate firm Cushman & Wakefield recently predicted that there could be 1 billion square feet of unused office space in the US by 2030.
The New York Fed said earlier this year that it was unclear when or if the commercial real estate sector would return to its prior strength.
While the residential rental market has bounced back, the retail and office markets have remained slack – largely due to the shift to remote work and online shopping, the bank said in a posting on its website.
Commercial rents in Manhattan are down a lot from where they were before the pandemic, and this weakening trend may continue as more and more commercial tenants roll off leases that were negotiated when demand for office and retail space was far stronger.
The winners of this year’s Screen Actors Guild Awards (SAG) have been revealed – a major predictor of the Oscars, with just a week to go.
Demi Moore continued her run of success to be named best actress for her performance in body horror The Substance, while Timothee Chalamet picked up the award for best actor for his portrayal of Bob Dylan in A Complete Unknown.
Image: Demi Moore adds yet another tropy to her collection for her performance in The Substance. Pic: Jordan Strauss/Invision/AP
While not a complete shock, before this Adrien Brody had probably just nudged it as favourite for an Oscar win for his performance in post-war epic The Brutalist.
Now, the race is closer than it has been in years – and both Chalamet, 29, and Moore, 62, could be on course for their first Academy Awards.
Following a BAFTAwin earlier this month, papal thriller Conclave was honoured with the top film prize, for best ensemble.
Starring Ralph Fiennes, Isabella Rossellini and Stanley Tucci, the film follows the drama of the selection process for a new pope.
Image: Conclave stars (L-R) Sergio Castellitto, John Lithgow, Isabella Rossellini and Ralph Fiennes with the ensemble cast award. Pic: Jordan Strauss/Invision/AP
Elsewhere, the supporting categories were true to 2025 awards season form – Kieran Culkin and Zoe Saldanacontinued their runs of success with wins for performances in A Real Pain and Emilia Perez respectively.
‘I want to be one of the greats’
Image: Chalamet attended with his mum, Nicole Flender. Pic: Jordan Strauss/Invision/AP
The awards are voted for by members of the SAG-AFTRA union and are held as a celebration of actors honoured by their peers.
For the best male actor announcement, Chalamet looked visibly surprised as his name was called.
After being accompanied by girlfriend Kylie Jenner to the BAFTAs last week, this time round he was celebrating with his mum, Nicole Flender.
“The truth is, this was five-and-a-half years of my life. I poured everything I had into playing this incomparable artist, Mr. Bob Dylan, a true American hero,” he said on stage. “It was the honour of a lifetime playing him.”
Making no secret of his ambitions, he added: “The truth is I’m really in pursuit of greatness. I know people don’t usually talk like that, but I want to be one of the greats.”
Moore said joining SAG-AFTRA as a teenager in 1978 gave her meaning as “a kid on my own who had no blueprint for life”.
Image: Jane Fonda was honoured with a lifetime achievement award. Pic: AP/Chris Pizzello
Actress and activist Jane Fonda, 87, provided the ceremony’s most passionate political moment as she was honoured with a lifetime achievement prize.
“We are in our documentary moment,” she said. “This is it. And it’s not a rehearsal.”
The word “woke”, she added, “just means you give a damn” about others.
The TV winners
Image: Shogun stars (L-R) Tommy Bastow, Shinnosuke Abe, Moeka Hoshi, Hiroyuki Sanada, Anna Sawai, Tadanobu Asano and Hiroto Kanai. Pic: Jordan Strauss/Invision/AP
The SAG Awards also include TV categories, with Japanese historical drama Shogun picking up the gong for best ensemble and its stars, Hiroyuki Sanada and Anna Sawai, named best actor and actress.
Only Murders In The Building took home the prize for best comedy ensemble, with star Martin Short named best actor in a comedy series.
Jean Smart, who had previously called for cancelling the awards shows due to the wildfires that hit LA in January, was named best actress in a comedy, for her role in Hacks. She did not attend, but gave a recorded introduction.
In the limited series category, British star Jessica Gunning was named best actress for Baby Reindeer, while Irish star Colin Farrell was named best actor for The Penguin.
Russian oligarchs with links to the Kremlin can now be banned from the UK, the government has announced as part of a fresh sanctions package on the third anniversary of Vladimir Putin’s invasion of Ukraine.
The Home Office said “elites” linked to the Russian state can now be prevented from entering the UK under the new sanctions.
Those who could be banned include anyone who provides “significant support” to the Kremlin, those who owe their “significant status or wealth” to the Russian state, and those “who enjoy access to the highest levels” of the regime.
The announcement has been timed to coincide with the three-year anniversary of Russia’s invasion of Ukraine.
Another set of sanctions is expected from the Foreign Office on Monday.
Security minister Dan Jarvis said: “Border security is national security, and we will use all the tools at our disposal to protect our country against the threat from Russia.
“The measures announced today slam the door shut to the oligarchs who have enriched themselves at the expense of the Russian people whilst bankrolling this illegal and unjustifiable war.
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“My message to Putin’s friends in Moscow is simple: you are not welcome in the UK.”
The UK government said Kremlin-linked elites can pose a “real and present danger to our way of life” as they denounce British values in public “while enjoying the benefits of the UK in private”.
It said they can act as “tools” for the Russian state to enable President Putin’s aggression in Ukraine and beyond.
Shortly after the war in Ukraine started on 24 February 2022, the UK imposed financial sanctions on oligarchs, including closing legal loopholes used to launder money.
In November last year, Operation Destabilise, run by the National Crime Agency (NCA), successfully disrupted two billion-dollar Russian money laundering networks operating around the world, including in the UK which was a key hub.
They provided services to Russian oligarchs and were helping fund Kremlin espionage operations.
Image: Ekatarina Zhdanova is said to have run a money laundering network called Smart that has been shut down. Pic: NCA
One of the key players was identified as Ekaterina Zhdanova who is alleged to have run a money laundering network called Smart. She was sanctioned by the US in November last year and is currently in French custody awaiting a trial.
A total of 84 arrests were made under Operation Destabilise in November and more than £20m in illicit funds seized.
The NCA has made a further six arrests since then and seized £1m more in case.
The networks also helped Russian clients to illegally bypass financial restrictions to invest money in the UK.
US officials have been in talks with their Russian counterparts in Saudi Arabia over the future of Ukraine for the past week.
However, neither Ukraine nor any European country was at the table, with Ukrainian President Volodymyr Zelenskyy saying he will not accept any peace deal Kyiv is not involved in.
Sir Keir Starmer has backed Mr Zelenskyy on that so all eyes will be on the prime minister when he visits Mr Trump in Washington DC this week.
US Bitcoin ETFs saw $1.14 billion in outflows over two weeks, the largest since their launch, as trade tensions and monetary policy concerns weighed on investor sentiment.