It’s time to be honest about America’s commercial real estate hangover
Commercial real estate has tumbled into a debilitating pattern of “extend and pretend”: lenders have essentially rolled over troubled loans, hoping for a miraculous future Fed rescue.
That doughty – somewhat dull – Canadian insurance company known as Manulife does not often attract attention. This week, however, it caused a frisson in the real estate world.
Shortly before Jay Powell, Federal Reserve chairman, announced that the central bank was keeping benchmark rates at 5.25 per cent to 5.5 per cent, Colin Simpson, Manulife’s chief financial officer, revealed that the group had written down the value of its US office investments by 40 per cent from a pre-COVID-19 peak.
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Financial Times
Gillian Tett is chair of the editorial board and editor-at-large, US of the Financial Times. She writes weekly columns, covering a range of economic, financial, political and social issues.
