The Commercial Real-Estate Dam is Breaking

August 09, 2023

by David Haggith GoldSeek

The image above shows the badly swollen Mendenhall River, which has risen to something like a thousand-year/never-happens level as an ice dam on Mendenhall Glacier has given way, dumping a raging torrent from the glacier’s trapped lake at Suicide Basin into the river. That is a fitting symbol of what just happened in commercial real estate and to its bankers today.

First, Fitch downgraded the US government last week. Naughty business that busted Biden’s chops. (Busted Republican chops, too, because both parties played games with the nation’s credit.) It said, “You don’t get to forever use the nation’s credit as a bargaining chip with no consequence to US credit ratings.”

Now Moody’s is in a bad mood, downgrading a swath of 10 US minor-league banks overnight while also issuing a big threat that it may downgrade some of the majors.