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“Absolutely Stunning”: CRE Analyst Lists Latest Office Tower & Mall Valuation Collapses 

by | Jul 30, 2024 | Top Ten


The commercial real estate downturn is still underway, posing significant risks for investors across financial markets. CRE-linked equities, corporate credit, structured credit, and private markets all feel the impacts of major unwinds as property prices plunge. 

While headwinds from high interest rates may diminish in the coming quarters, with rate traders pricing in the possibility of the first 25bps cut as early as the mid-September FOMC meeting, the critical question is whether these projected rate cuts will be adequate to cushion the landing. 

Office tower valuations remain sloped in a downward trend, plummeting in many cases, as vacancy rates soar as remote work trends keep blue-collar workers out of the office and at home. These imploding values remain a massive threat to regional banks, with the CRE crisis likely to persist through 2025. 

X user Triple Net Investor offers a sobering reality of the CRE space. He closely follows the space and noted dozens of recent valuation declines for malls, towers, and multi-family properties. 

Here are the examples of why the CRE storm is not over:

One of Maryland’s largest malls, called White Marsh Mall, located in a northeast suburb of Baltimore County, had a stunning valuation plunge of $240 million over a little more than a decade. The property was once valued at $320 million in 2013 – it now has a valuation of around $80 million.

“This is a commercial real estate apocalypse,” Triple Net Investor said. 

He said, “This is absolutely insane.” 

He pointed out Trump’s “incredibly well-timed deal” to sell the Trump International Hotel in 2022. 

A multi-family complex in foreclosure in Dallas, Texas. 

He said, “Blackstone has filed to foreclose on the 33-story McGraw-Hill skyscraper in the Hell’s Kitchen neighborhood of Manhattan.” 

And this. 

More pain. 

It just gets worse.

Oops. 

GnS Economics analysts Mate Suto and Tuomas Malinen recently warned:

“Basically, almost every bank in the US is holding some type of CRE loan on their balance sheets. Therefore, it is no surprise that this is an area warranting close observation, especially because the risks posed by CRE exposure spread quite unevenly between large and small banks.”

Fed Powell has a rolling crisis on his hands. And the goal is to save the fireworks for after the election. 

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