Josh Friedman, co-founder and co-CEO of Canyon Partners, a leading alternative asset manager, warned on Tuesday that there is “going to be carnage” in some parts of the commercial real estate business.

Friedman made the comments on the sidelines of the Milken Institute Global Conference in Beverly Hills. He said that the commercial real estate market is facing a number of headwinds, including rising interest rates, inflation, and a slowdown in economic growth.

“In the beginning of any downturn, the first things that comes to light are the worst problems,” Friedman said. “There’s going to be carnage in some parts of the commercial real estate business.”

Friedman said that the most vulnerable parts of the commercial real estate market are those that are heavily reliant on debt financing. He said that many commercial real estate companies took on too much debt during the years of low-interest rates and that they are now struggling to make their payments as interest rates rise.

“There’s been a lot of leverage built into the system,” Friedman said. “As rates go up, that’s going to put a lot of pressure on people.”

Friedman said that he expects to see a number of commercial real estate companies default on their loans in the coming months and years. He said that this could lead to a wave of foreclosures and bankruptcies, which could have a ripple effect on the broader economy.

“This is going to be a very challenging period for commercial real estate,” Friedman said. “There’s going to be a lot of pain.”

Friedman’s comments come as the commercial real estate market is already showing signs of stress. The price of office space has fallen in many major cities, and there is a growing inventory of vacant retail space.

The Federal Reserve is expected to continue raising interest rates in an effort to combat inflation. This could put even more pressure on commercial real estate companies, which are already struggling to make their payments.

It remains to be seen how severe the carnage in commercial real estate will be. However, Friedman’s comments suggest that it could be a major problem for the economy in the future.





Share this post:

READ ALSO:
Ex-Tenant Faces Court After Allegedly Stripping Apartment of Electrical Fixtures

A Lagos resident, identified as 48-year-old Paul Orizu, has been arraigned before the Ebute-Metta Magistrates' Court on charges of theft and breach of peace.

Young Canadians Face Bleak Economic Future as Affordability Woes Mount

The dream of homeownership and financial security seems to be slipping further away for young Canadians.

Guest posting

Recent posts

Sponsored

storeboard-adv7.png



Trustpilot
paytolet.com
Estimated worth
$ 2,008.67
paytolet_footer