Billionaire CEO Forecasts Up to $1 Trillion in Commercial Real Estate Defaults Ahead, But Believes Economy Will Cope
• Billionaire CEO Howard Lutnick predicts $700B - $1T defaults in commercial real estate over next 2 years due to rising interest rates, remote work, e-commerce • 25% of $1.2T commercial real estate debt maturing by end of 2025 is held by struggling office/retail operators • Commercial real estate prices have fallen 11% since March 2022 Fed rate hikes, worst decline in 50+ years • Defaults could restrict lending, trigger vicious cycle of tighter funding, falling prices, losses for banks • Lutnick believes economy can cope with commercial real estate issues, but forecasts slower growth over next few years