Asset Manager Warns that US Commercial Property Vulnerable

Given the recent banking problems linked with the tightening of monetary policy, there are concerns that US commercial property could be the “next domino to fall”, as reported by The Australian.

• SPI Asset Management managing partner Innes said "With nearly $US6 trillion ($9tn) commercial lending paper sitting like a dead weight on bank balance sheets, the sector continues to face a confluence of post-pandemic challenges, including falling occupancy rates, declining real estate value and, more recently, rising defaults. Coupled with higher funding costs, and tighter lending standards, this implies a challenging fundamental backdrop in upcoming months”.
• Innes sees the current banking issues as an “unavoidable consequence” of coordinated “disproportionate” monetary and fiscal easing during Covid.
  - The Australian