The rise in vacant office buildings is more than just an eyesore\u2014it\u2019s a ticking time bomb threatening the U.S. economy. With commercial real estate delinquencies at record highs and over $1 trillion in loans coming due by 2025, small and regional banks are dangerously exposed. In this video, we uncover how this crisis mirrors 2008, how it could lead to widespread bank failures, and what you can do to protect yourself. Learn why physical gold and silver are critical in uncertain times.<\/p>\n
CHAPTERS:
\n00:00 Introduction: Empty Office Buildings\u2014A Hidden Crisis
\n00:25 Commercial Real Estate Delinquencies Surge
\n00:55 Breaking Down the Ripple Effects
\n01:10 How Big Banks Created the Problem
\n02:12 Historic Vacancy Levels: Landlords Defaulting
\n02:47 The Banks Holding the Risk
\n03:33 Why This Crisis Mirrors 2008
\n04:10 The Domino Effect: 4 Key Risks to Watch
\n06:05 \u201cSurvive Until 2025\u201d: A Doomed Strategy
\n06:43 Escalating Delinquencies: The Fastest Spike in History
\n07:26 How Bank Failures Could Ripple Through the Economy
\n08:00 Why You Can\u2019t Count on the Fed to Save You
\n09:09 Protect Yourself Now: Physical Gold and Silver<\/p>\n
TRANSCRIPT:<\/p>\n
00:00
\nYou’ve seen them\u2014the towering, empty office buildings with the lights off and the doors locked. But what if I told you that all of those empty buildings were a ticking time bomb? And when it explodes, it could bring down the entire economy\u2014and your finances\u2014with it. The delinquency rate for office loans has surged to 10.4%, just shy of the peak during the 2008 meltdown. And the speed of the crisis? It\u2019s the fastest-growing we have ever seen.<\/p>\n
00:25
\nThere\u2019s also a new study out that says almost 34% of companies are cutting or completely getting rid of office space. Every single regional and local bank across the country is now assessing their loan assets and liabilities, and as a result, they\u2019re going to be more discerning about extending credit to commercial real estate. Something must be done because there are so many commercial real estate loans that are coming due between now and 2025.<\/p>\n
00:55
\nToday, in this video, I\u2019ll break down just how bad the situation has gotten, how all of these empty offices could cause a ripple effect through the economy, hurting you, and most importantly, how you can protect yourself.<\/p>\n
01:10
\nDespite pronouncements by landlords earlier this year that commercial real estate had bottomed out, we continue to see vacancies rise. But it wasn\u2019t always this way. In 2019, we saw a very different picture being painted. Big banks fabricated a lie\u2014go figure\u2014that there was an office shortage, prompting companies to lease space that they didn\u2019t really need when rates were near zero, willing this office shortage propaganda into existence just in time for the pandemic to hit.<\/p>\n
01:33
\nBut many wrongfully assumed that vacancies from the pandemic would be temporary. Even as businesses call their employees back in, vacancies continue to rise, exposing the truth: many of these office buildings, especially the older ones, are worth far less than previously priced\u2014sometimes 50\u201370% less than they were on paper.<\/p>\n
02:12
\nNow, today, with historic vacancy levels, landlords are choosing to stop making their payments because they cannot afford to. They are not generating enough in rent to cover interest and other expenses, hence the rising delinquency rates.<\/p>\n
02:25
\nBut as these delinquencies rise, who is actually holding the loans? Simply put: as more landlords default, it\u2019s banks holding these loans that are at risk.<\/p>\n
02:47
\nWhat no one is looking at is the exposure to commercial real estate that smaller and regional banks are holding. While the largest banks have about 50% of their risk capital tied up in commercial real estate, the picture is far bleaker when we look at small and regional banks, which account for 150% and 228% of their total risk exposure\u2014far above what anyone would consider a safe risk level.<\/p>\n
03:33
\nIf these loans go bad\u2014and they already are\u2014then banks could fail. And when banks fail, it impacts everyday Americans.<\/p>\n
03:44
\nThis isn\u2019t just an office vacancy problem. Remember 2008? It started with bad home loans. Today, it\u2019s bad office loans. Different buildings, same potential for disaster.<\/p>\n
04:10
\nCue the domino effect in four parts.
\nNumber one: banks fail, leaving your savings at risk. As the stock market crashes, any investment you have tied up with financial institutions leaves you vulnerable.<\/p>\n
Number two: banks pull back on lending to businesses and individuals. Let me ask you, what happens when a business doesn\u2019t have access to a loan? Well, we see the layoffs increase. That means your job, your friend\u2019s job, and your family member\u2019s job are all at risk of disappearing.<\/p>\n
Number three: if commercial real estate collapses, it drags down the value of homes and properties nearby, meaning your home could be worth less, even if you\u2019ve done nothing wrong and everything right.<\/p>\n
And last but not least, number four: can you guess what it is? Someone out there is sitting there thinking to themselves, \u201cWell, none of this matters anyway because the government will just bail us out.\u201d Well, what have we learned from the past?<\/p>\n
04:46
\nIf the government were to step in, we would see inflation grow from where it already is today, meaning that the dollars in your wallet, your savings, and your retirement would all be worth less.<\/p>\n
05:05
\nBut how close are we? Anyone who thinks that this is temporary is sadly mistaken because there is nothing temporary about the glut of excess office buildings, especially the older buildings, as a result of years of overbuilding and companies hogging space at near-zero interest rates that they had no use for in the first place.<\/p>\n
05:27
\nVacancies are not going away. That means that U.S. banks are facing a reckoning. Over the next year and a half, over a trillion dollars’ worth of commercial real estate is coming due, meaning that the chances are heightened of hundreds of banks failing simultaneously. This is scary stuff.<\/p>\n
06:05
\nWhat is their solution? \u201cSurvive until 2025.\u201d That has been the catchphrase, under the assumption that vacancies would go up and interest rates would come crashing down. But as we start the new year, what are we actually faced with? Smaller interest rate cuts nowhere near what these banks were hoping for.<\/p>\n
And even if, miraculously, interest rates come all the way back down to zero overnight, most of these landlords are still unable to keep up with payments. The rate of escalating vacancies has led to the fastest two-year spike in delinquencies in history, meaning that this crisis isn\u2019t slowing down\u2014it\u2019s speeding up.<\/p>\n
06:43
\nThe clock is ticking on these banks, who are not facing the truth about these commercial real estate loans. So far, they\u2019ve \u201cextended and pretended,\u201d changing the terms of the mortgages, allowing for grace and more time in an attempt to mitigate their losses.<\/p>\n
07:26
\nAll it takes is a 10% loss on commercial real estate loans to render 100 banks, representing over a trillion dollars in assets, undercapitalized. But if that number jumps up to 20%\u2014a 20% loss on commercial real estate\u2014now we have over 900 banks across the United States that are left undercapitalized.<\/p>\n
08:00
\nAnd as I\u2019ve outlined before, do not count on the Fed, the FDIC, or even the larger banking institutions to come in and save hundreds of banks simultaneously. It\u2019s just not going to happen that way.<\/p>\n
Now is the time to protect your savings and to prepare for what\u2019s coming before it\u2019s too late. Do not be the one left behind who did not prepare, who did not have a plan in place when all the warning signs were flashing red.<\/p>\n
09:09
\nBut thankfully, history has already shown us what to do in these situations. When financial systems crumble, you want to have physical gold and silver outside of the system to protect your wealth. But the only way that works is to have your insurance plan, to have your strategy in place before it all comes crashing down.<\/p>\n
09:42
\nIf any of this is concerning to you and you do not have a plan in place, I highly recommend you talk to one of our expert analysts. Even if you do have a plan in place, I still recommend getting a second opinion because they understand these threats. They will give it to you straight and help you make sure you have a strategy in place that is right for your concerns and your goals.<\/p>\n
As always, I so appreciate you being here. I\u2019m Taylor Kenney with ITM Trading, your trusted source for all things gold, silver, and lifelong wealth protection. Until next time.<\/p>\n
SOURCES:
\nhttps:\/\/www.barrons.com\/news\/us-fed-concerned-about-rise-in-office-loan-delinquency-abd186b1<\/p>\n
https:\/\/finance.yahoo.com\/news\/survive-25-rxr-ceo-lays-220603999.html?guccounter=1&gu[\u2026]d6BziNlFZpNsqvY5E81XfjnKuIYtBNuTIRapdzG67_3b0RvzJtwCeREh-UK2<\/p>\n
https:\/\/www.globest.com\/2024\/10\/25\/cre-mortgage-delinquencies-climb-as-office-struggles-persist\/<\/p>\n
https:\/\/www.bloomberg.com\/news\/articles\/2024-06-27\/offices-will-be-even-more-empty-in-2026<\/p>\n
https:\/\/hbr.org\/2024\/07\/u-s-commercial-real-estate-is-headed-toward-a-crisis<\/p>\n
https:\/\/www.worldpropertyjournal.com\/real-estate-news\/united-states\/new-york-city-real-esta[\u2026]4-commercialedge-us-office-market-report-pet-14267.php<\/p>\n
https:\/\/fortune.com\/2024\/11\/15\/return-to-office-loan-delinquencies-commercial-real-estate-crisis\/<\/p>\n
https:\/\/www.businessinsider.com\/commercial-real-estate-cre-debt-office-vacancy-bank-lending-moody-2024-9<\/p>\n
https:\/\/www.mpamag.com\/us\/specialty\/commercial\/cmbs-delinquencies-rise-again-as-office-loans-face-growing-distress\/516481<\/p>\n
https:\/\/wolfstreet.com\/2024\/11\/30\/office-cmbs-delinquency-rate-spikes-to-10-4-just-b[\u2026]t-of-financial-crisis-cre-meltdown-fastest-2-year-spike-ever\/<\/p>\n","protected":false},"excerpt":{"rendered":"
The rise in vacant office buildings is more than just an eyesore\u2014it\u2019s a ticking time bomb threatening the U.S. economy. With […]<\/p>\n","protected":false},"author":34,"featured_media":36378,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2684],"tags":[81,89,1473,2716,4094,4160,4163,4392,4462,4901,5105,5106,5107,5108,5109,5110,5111,5112,5113,5114],"class_list":["post-36374","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-taylor-kenney-itm-trading","tag-hyperinflation","tag-itm-trading","tag-economic-collapse","tag-taylor-kenney","tag-gold-as-insurance","tag-gold-and-silver-investment","tag-inflation-impact","tag-protect-your-wealth","tag-financial-system-collapse","tag-banking-sector-risks","tag-commercial-real-estate-crisis","tag-office-loan-defaults","tag-vacant-office-buildings","tag-bank-failures-2024","tag-real-estate-delinquencies","tag-commercial-property-crash","tag-economic-trends-analysis","tag-2024-financial-outlook","tag-office-loan-crisis","tag-us-economy-warning"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/36374","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/users\/34"}],"replies":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/comments?post=36374"}],"version-history":[{"count":2,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/36374\/revisions"}],"predecessor-version":[{"id":36379,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/36374\/revisions\/36379"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/media\/36378"}],"wp:attachment":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/media?parent=36374"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/categories?post=36374"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/tags?post=36374"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}