2023-09-12 04:21:00
Between 200 to 250 billion dollars
Dubai – Al Arabiya.net
Published on: September 12, 2023: 08:21 AM GST Last updated: September 12, 2023: 08:44 AM GST
Hayman Capital Management founder Kyle Bass said the US banking industry will lose hundreds of billions of dollars in exposure to the office market amid changing workplace trends and rising interest rates.
He added during an interview with Bloomberg TV that banks in the United States will lose between 200 and 250 billion dollars in their offices over time. Pointing out that the market value of the American banking sector amounts to regarding two trillion dollars, so this represents a loss of 10% for American banking stocks, according to what Al Arabiya.net viewed.
Office space is the main sector that will report losses in the commercial real estate market, while industrial and multifamily properties will remain strong, said Bass, known for his successful bet once morest subprime mortgages before the 2008 financial crisis.
Bass predicted that older, lower-quality office buildings in the United States will need to be torn down to reset the market. He is not alone in this opinion. The Canadian investment company Vincent Shea buys properties only to demolish them and take advantage of the land.
High interest rates and stringent lending conditions make it more difficult for real estate developers. While Bass does not expect the Fed to raise interest rates much higher, he expects wages to remain strong.
“We will have a difficult situation regarding wages and we will see the economy decline in the next six to eight months,” he said.
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