Commercial property pain is only just beginning
Viewsroom
Reuters
4.4 • 58 Ratings
🗓️ 13 April 2023
⏱️ 13 minutes
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| 0:00.0 | AI is incredible. They can teach you how to fry an egg and even write a poem, pirate style. |
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| 0:28.8 | to learn more. The views expressed on this podcast are those of the participants, not of Rogers News. |
| 0:38.2 | So they've had these very sort of low yields. They call them cap rates. It's sort of the industry |
| 0:43.6 | term for the yield and the rent of the properties. They have these very low cap rates. And then |
| 0:48.2 | all of us on this very high funding issue. And that has caused like an inversion in the market that hasn't happened since |
| 0:55.6 | Lehman Brothers, whereby in a lot of these sectors, you're getting lower yield on rent than the |
| 1:00.4 | cost of borrowing. And this is a huge problem. Dorm clouds are gathering over the commercial |
| 1:05.5 | property sector. Higher interest rates are making the offices and shopping malls less appealing. And |
| 1:10.8 | if landlords can't manage to finance the debt or raise rents, defaults will follow. |
| 1:16.5 | The looming crisis in the sector is the focus of this week's Views Room. |
| 1:22.7 | Welcome back to the Viewsroom, the podcast from Reuters Breaking Views, where columnists from around the world talk about the big stories of the week. I'm your host, Amy Dunlin. |
| 1:34.3 | The real estate market of shopping malls and office blocks is straining in a world of |
| 1:39.4 | higher interest rates. For prospective buyers of property, higher rent is a must-have to make up for the inflated |
| 1:45.9 | cost of borrowing. But when companies are considering culling space as they embrace hybrid working, |
| 1:51.4 | that may not be so easy. Here to talk to me about this evolving situation is Lauren Silva-Lockden, |
| 1:57.0 | US editor of Breaking Views, who has been delving into this topic. |
| 2:00.9 | Thank you. Lockdown, US editor of Breaking Views, who has been delving into this topic. |
| 2:12.0 | You are very welcome back, Lauren. Thank you so much for having me. |
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