China is not the only country facing financial crisis in property management
China may not be the only country with property management problems. There are also signs of property problems in the United States.
In December and for several months we have been reporting on the collapse of property management business in China. The industry, which accounted for a quarter of China’s GDP, is crumbling as companies no longer pay their debts. Evergrande Chinese company with $ 300 billion debt falling apart. Evergrand’s affluence seemed to be part of a bigger problem.
China’s property sector is showing signs of collapse, which will significantly affect the Chinese economy
Now we need to look at the US real estate market, especially the commercial real estate market. Covid has shown that companies no longer have to maintain huge office buildings for their employees. People can work from home. These cost savings were targeted and large inner cities would suffer.
Zero Hedge Report:
The world’s largest owner of commercial real estate, Blackstone 1740 Broadway, handed over the keys to a 26-story office tower in a block from Carnegie Hall to its $ 308M commercial mortgage-backed security special services provider, trade observers reported.
Deutsche Bank introduced the loan in 2015 as part of a single-asset, single-borrower CMBS agreement and listed Green Loan Services, a provider of specialized services for managing financing agreements. Blackstone has extensive Manhattan holdings and the decision to hand over the keys to the Green Loan Service is “the only event”, a source close to the deal said.
Blackstone bought the 621K SF tower from Vornado Realty Trust in 2014 for 5 605M. It has lost two major leases in recent years, with law firm Davis + Gilbert moving to Rudin’s 1675 Broadway in 2019 and El Brands choosing not to renew its 418K SF lease instead of moving to 55 Water Cent in 2020.
“This asset faces a unique set of challenges, and we are working diligently to find a solution in the best interests of all parties involved, including our investors and lenders.” A Blackstone spokesman spoke about the building.
“The lion’s share of our office portfolio consists of separate office features, such as the Life Science Office and office features benefit from the content creation tailwind, and we are confident that these features will continue to be surpassed. We’ve become big believers in cities like New York and the like, which are centers of innovation and talent. “
1740 Blackstone’s decision to reduce losses on Broadway echoes recent moves in Chicago, another office market suffering from macroeconomic changes. According to CMBS tracking firm Trap, last week, two towers larger than 1M SF each were on their way to find themselves in the hands of lenders.
After crushing the job market for small business owners during Covid’s time, now big buildings are fast becoming a thing of the past. It seems that China is not alone. However, commercial property business in the United States is much smaller than in China as a percentage of GDP.
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