A lot of talk about regional banks exposure to commercial real estate. From my perspective urban office is the significant weak spot but is the concern overblown?
Physical vacancy is different than economic vacancy meaning these large tenants will bear some of the brunt as they attempt to sublease or buy-out their remaining obligations.
Owner occupants likely have more exposure on their business performance rather than value of corporate headquarters etc.
Large urban office buildings are not typically financed by smaller banks or at minimum the loan has participation with another bank.
Bottom line is we’re talking about institutional investors with public companies (financial services etc) as tenants and institutional debt (life ins etc).
Where am I missing? #[0] #[1] #[2]