From Insider:
Most of Wall Street is panicking about commercial real estate – but Goldman Sachs says there’s little chance it triggers a financial crisis
It seems like there are three words on the lips of every investor now that panic around the US’s regional banking sector is starting to die down: commercial real estate.
Big names ranging from Bill Ackman and Elon Musk to Bank of America and JPMorgan have predicted that the troubled sector will be where the next cracks appear in the US financial system – but Goldman Sachs bucked that trend this week.
“The risk of a vicious circle of large leveraged losses and undercapitalized balance sheets that would pose a threat to financial stability is still limited,” strategists Lotfi Karoui and Vinay Viswanathan said in a research note published Monday.
Goldman Sachs’ view clashes with analysts such as Bank of America’s Michael Hartnett, who said in a research note last week that commercial real estate would likely be the “next shoe to drop as lending standards… tighten further.”
Hartnett believes that a wave of upcoming refinancings of commercial real estate loans at much higher interest rates than in the past could spark a credit crunch in the sector, sending stocks spiraling and the economy into a recession.
…
While Karoui and Viswanathan are anticipating massive issues in the office sector – an area that other strategists have expressed concern about as well – they believe that apartments, manufacturing plants, warehouses, and other types of commercial real estate are better-capitalized and won’t suffer a huge crash.
“We expect office loan delinquencies to materially increase, but think this is unlikely to lead to systemic risk given healthier fundamentals in other commercial real estate subsectors,” the Goldman Sachs strategists said.
The turmoil will likely be contained to office loan delinquencies “given healthier fundamentals in other commercial real estate sub-sectors such as apartment and industrial properties, as well as in other parts of credit markets,” Karoui and Viswanathan added.
Good Morning New Jersey
Oof – that’s a tight squeeze for the GAF property:
https://therealdeal.com/new-york/2023/04/07/nj-based-ridgewood-plans-449-homes-on-defunct-commercial-site/
Better rendering. Looks to be as much 8 townhomes per building block. Are they going 3 story with garage on first floor? Luxury villas all for the low price of $1,299,999 and up.
https://ridgewoodrep.com/wp-content/uploads/2022/09/The-Villas-at-Wayne-Hills-Rendering.pdf
Red meat for Phoenix to go with his Easter ham.
https://www.businessinsider.com/boomers-buying-homes-blocking-millennials-housing-market-real-estate-prices-2023-4?utm_source=copy-link&utm_medium=referral&utm_campaign=Insider+Today+Sunday+Edition+April+9&utm_term=INSIDER+WEEKLY+-+ALL+ENGAGED&utm_content=topbar
LW
Haha. Don’t celebrate Easter anymore.
The irony of the article is how the youth went and saved all of those ungrateful old goats during Covid only to have them breathe again and continue on like locusts.
I made the mistake of saving my ex’s life. If Dr Emmett Brown’s time machine ever becomes a reality though….
Lib,
Thanks again for your advise. Guess we will see what happens.
You are the voice of reason.
The GAF property is deceivingly large at 100 acres. The entrance from Alps road is sort of this very nondescript corporate driveway that at one point had some minimal signage.
You wouldn’t at all have any idea what was back there, you might think it was a warehouse or small office block – certainly not 100 acres.
$17 million for that seems like a good deal, $170k an acre-ish.
Not as good as the $19 million for the Toys R Us property, 193 acres $100k an acre-ish.
So roughly, 2500-ish units between those two properties, which are actually in pretty close proximity to each other.
Both of these would be considered Wayne Hills, worse, both would be considered Colfax middle school. That ain’t going to work without some potential redistricting.
“I made the mistake of saving my ex’s life. If Dr Emmett Brown’s time machine ever becomes a reality though….”
On the occasion I met my ex- it was literally a six second window…three seconds either side, the entire It’s A Wonderful Life counterfactual narrative takes over…
Can’t tell you how many times I wished I stopped to tie my shoe, hit a red light, or didn’t stop to take a leak going out the door.
Hell, in hindsight, I would taken getting rear ended by someone going 40 mph and totaling out my car lol. At the time I sure would have been pissed, but the future me…..
Joke for you two diamond bachelors Left and Phoenix.
https://www.youtube.com/watch?v=2QMxUgMsbUQ
C’mon, you are 36 y/o with a pension. Makes you a single woman’s wet dream.
“A former Union County grade-school teacher and youth soccer coach from Morristown admitted in federal court that he posed as a woman online to lure at least 70 underage boys into sending him nude photos and videos, authorities said.
Steven Brooks, 36, who’d taught fifth grade at Washington Elementary School in Summit and helped run the Livingston Soccer Club for nearly a decade, used other images of child pornography to solicit new material, an FBI complaint says.”
They will use COAH to force the higher density plans over the objections of everyone that lives in town.
This is the way….
Juice Box says:
April 9, 2023 at 10:18 am
Joke for you two diamond bachelors Left and Phoenix.
Problem isn’t that men have two heads. It’s that when we were designed he fucked up and only gave us enough cardiac output to operate one or the other, but not both at the same time.
NJ, the paved over state.
Aside from acreage I’d also look at per unit. $17m land purchase (unimproved) for449 units at a starting price of $1.3m…that’s $38k per unit.
last one I saw pass through near me was $10m for 52 units at $1.4m or so, or $192k per unit.
Not sure which way the costing of improvements cut, in favor of a smaller tract or larger. This small tract was hillside, so despite size did have some serious work performed.
All in, sounds like your developer got a nice deal. Maybe less so the SFH residences in that area….
“Steven Brooks, 36, who’d taught fifth grade at Washington Elementary School in Summit and helped run the Livingston Soccer Club…”
oooof, that may capture some on here….
JB, yeah, the development I referenced was in conjunction with COAH. Zoned SFH, but with the steep slopes getting any kind of subdivision through would have been nearly impossible for a private transaction. Interestingly the COAH remedy was part of a package, in that the COAH housing was being built on a separate lot farther away and this lot is solely high end townhouses. I fucking hate liberals. Always screwing with your life for their unproven social engineering ends.
Re: Two and Half Men, great series lol. There’s a clip I tried to find for Phoenix, one where the kid is discussing with the younger brother who pays for his stuff…divorced mom or divorced dad as dad is getting bled dry. Hilarious, could not find the clip though to post. May need to look again.
Iphone out of service, updating trying to keep my phone safe from Pegasus and hackers.
What is so wrong with people can’t they just work trying to make life better in society?
There are more grifters and swindlers than people who actually work for a living.
For all you Wayne residents, I was at the Laurelwood Arboretum yesterday. Very nice, very peaceful. The weather was great as well. It’s a hidden gem, really didn’t know about it. I’ll visit again.
As for the proposed housing on these corporate campuses, it’s sad. It’s just sad. We preach climate change and we’re plowing tracts of green land like mad.
Like the ghetto trash who sat next to us on our flight home from Jacksonville. You know the type. Super tight white pants, though a little too thick to be wearing them. Half shirt with belly sticking out. Hair dyed bright red though eyebrows and lashes black. Well she spent the two-hour flight taking selfies. But not before watching TikTok videos at top volume for fifteen minutes annoying everyone within hearing distance who kept wincing at her incredulous bad manners before engines started. Once wheels up, she orders a cranberry vodka at 7am. When the flight attendant comes around to charge her for it, the credit card gets rejected twelve times. Eventually the flight attendant gives up and she gets the drink for free, well since it’s long gone and they don’t take cash. When we land and they signal it’s clear to get up, she runs halfway up the aisle to get off. Then JetBlue had a problem with a jetway and she ends up getting stuck smushed in the aisle for nearly 30 minutes. And the TikTok videos start rolling again. But karma came in spades. As she was stepping out of the plane onto the poorly aligned jetway, she falls head over platform shoes with giant heels and nearly everything in her fake Gucci bag goes flying all over the place. Unsurprisingly, no one offers to hep her except for the baggage handler who was delivering the gate checked bags. Karma.
But was she woke, Lib? Was she woke?
Lib did you get her channel? I love to see if you are on it hahahahaha!
BTW Lib one man’s trash is another man’s treasure I am pretty sure the baggage handler was looking for a date.
BTW if you did not get my diamond bachelor comment this is a great TikTok…
She does lots of interesting Chinese translations.
https://www.tiktok.com/@candiselin86/video/7209084783106723114
Errr. The Christian references and civil rights stuff is troubling. Somebody only uses those kind of low grade tactics to hide monstrous lies and distortions. Very Farrakhan of him. The guy totally creeps me out. He’s a little bit Sharpton, a little Jeremiah Wright and a little bit the Squad. He walked in guns blazing and got smacked down. He’ll be back. Too ambitious and too much of a loudmouth to be held back. Drapes himself in Jesus Christ. Watch you wallet.
Grim says:
April 8, 2023 at 10:22 am
Pearson is an incredibly strong debater – watched a few other clips and that guy is clearly very smart, very well spoken, very well reasoned. He tap dances around these veteran Tennessee guys, and even when they try to paint him in a negative light, he easily spins it back in a very convincing way.
I can understand if you don’t care for the Christian references in his speech, maybe you don’t care for the fact that he is channeling the civil rights movement in way that we haven’t seen in decades
Painting the guy as a hooligan troublemaker? Come on now.
Reeks of retaliation.