Posted 1/17/2024, 6:45:00 PM
Cantor Fitzgerald CEO Warns of Potential Very Ugly Commercial Real Estate Crisis Ahead as Loans Default
- Cantor Fitzgerald CEO Howard Lutnick warns the US real estate market could get "very ugly" in the next 2 years due to rising rates and loan defaults
- He predicts $700B - $1T in commercial real estate loan defaults coming by end of 2024 from loans coming due over next 2.5 years
- High rates mean many commercial properties won't get enough proceeds from sales to pay off existing loans
- This will force property owners to default and "throw the keys back" to lenders on loans worth over $100M
- Lutnick believes predictions of significant Fed rate cuts (175bps) are "overly optimistic" and rates will likely only fall 50-75bps from current levels