Morgan Stanley analysts have issued a stark warning regarding the commercial real estate market in the wake of banking turmoil after the collapse of Silicon Valley Bank (SVB) and Signature Bank last month.
In a weekly Global Investment Committee note published on April 3, Lisa Shalett, chief investment officer for Morgan Stanley Wealth Management, noted that the commercial real estate sector faces a “huge hurdle” when it comes to refinancing, with commercial real estate prices potentially tumbling by as much as 4o percent from their peak.
Shalett pointed to multiple stock investors who have declared that the bear market is “over,” but noted that further turmoil in regional banking could tighten loan standards, which could in turn impact the real estate industry, an industry largely dependent on debt….