Short Sellers Target Office Buildings, Sending Wall Street Banks into Panic Mode

We’ve all heard the fears of an impending real estate crash since 2020 right?

Well your prepper friend isn’t gonna shut up when he hears this…

According to reports, Wall Street banks are looking to shed their real estate loans faster middle-aged white girls buy up tickets for a Taylor Swift pop up in their hometown.

How bad is it?

One source claims that office vacancies are predicted to skyrocket to a jaw-dropping 24% by 2026, potentially tanking property values by a whopping quarter-trillion dollars.

That’s enough empty office space to host the world’s largest game of hide-and-seek. And who's to blame? Well, remote work has become the cool kid on the block—saving costs, boosting productivity, and leaving office cubicles feeling lonelier than a party without cake.

(Source: Bloomberg)

It’s no secret that banks are stuck between a rock and a hard place. Do they hang onto these risky loans and pray for a miracle? Or do they dump them quicker than all the highschoolers just dumped skinny jeans for parachute pants? Spoiler alert: they’re opting for the latter, because waiting for the office market to bounce back is like hoping your expired milk turns into yogurt.

Big banks realize they can’t afford to play real estate roulette forever. They haven't just seen “The Big Short”... they lived it.

Take the recent sale of 1760 Market St. in Philadelphia, for example.

This office gem changed hands for a mere $11.5 million, that’s just one third of the price compared to what it sold for in 2018… This sale isn’t just a blip on the radar—it’s a neon sign flashing “Hey, real estate rollercoaster ahead!”

(Source: Philadelphia Magazine)

Adding to the drama, investors are doubling down on short-selling bets against commercial real estate.

They’re eyeing the sector like a hawk eyes a field mouse—ready to swoop in at any sign of weakness.

But amidst the chaos, there’s a silver lining. Smart investors, like the real estate experts at Blackstone Inc., are sniffing out opportunities amidst the rubble. They see potential where others see boarded-up storefronts and “For Lease” signs.

So how does this affect you?

Well although you’re probably not managing a hedge fund with billions of dollars… You may be at more risk to this scenario then you realize.

Make sure to check your portfolio and think twice about holding any REITs exposed to commercial real estate. While it may not be another 2008, it’s clear that this is just the beginning of an all out bargain sale.

Stock.News does not have positions in companies mentioned.