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11 thoughts on “Commercial Real Estate Article From Wall Street Journal”

  1. Given the size of the economy now and the balance sheet of the fed and players such as Blackstone, Blackrock and others 2.2 trillion over the next several years seems like no big deal assuming we don’t have a hard landing.

    Yes I said it, 2.2 trillion no big deal 🙂

  2. Who in their right mind would be doing short term interest only loans for 100’s of millions of dollars? Oh that’s right, banks and PE funds.
    Seems like some big Ponzi scheme like Jerrymac pointed out Blackstone opens up fund # 77 then #78 and pays off the investors in fund 77
    Is Blackstone still limiting redemption’s quarterly? I really quit following the news on them. Probably my bad, if something blows up with them it could affect others like dominos.

  3. Root of problem is interest only. Other people’s money painless to lose. Blackstone note certainly held by Blackstone Venture Fund #78? (Management fee ~7.5%?)🤔

  4. Tim, Remarkably reminiscent of the hard-money residential loan debacle from 2008/2009 when outsized rate-reset clauses were set to kick in after 2-years.

  5. Many of the points made in this excellent WSJ article are part of this short thesis paper by Muddy Waters


    This short sellers piece is focused on BXMT which is a CRE mREIT offered by Blackstone. Slide 43 of this deck discusses a particular loan on 444 Michigan Ave (Chicago not Detroit) that comes due this month. The investor call is on Feb 14th we will see what they have to say. This mREIT could really get pounded.

    This ZeroHedge article also appeared today


    All 3 of these (incl WSJ article) are good reading.

    There is simply no reason for any concentrated exposure to Office CRE debt at all. Nobody is getting paid for this risk in terms of returns IMO.

    I have no position in any office CRE debt, but will consider shorting BXMT via options selling strategies.

    1. I agree. Need a sub.

      But here is the jist of it.

      “The Bill Is Coming Due on a Record Amount of Commercial Real Estate Debt
      More than $2.2 trillion in debt is maturing before 2028, and much of that will have to be refinanced at higher rates”

      Interesting that they pulled out the 2028 number instead of something closer in like 2026. I guess 2.2 trillion is a nice shocking number. With that said I feel like forum members here are well aware of the situation.

      Here is an article that is more specific with an example of the chaos. I hope this allows me to post a link to zerohedge.


    2. Slap the link in this bottom blue box link and presto you got the article.

      Now, me, I got a tiny amount of bank preferreds. I prefer the business model of when a customer screws you over, you accrue it and then get it all back from the customers who actually pay what they owe. Not the bank model where they drop the keys off with a dubious value left in it.

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