Everyone can see the slow-motion train wreck that is unfolding right in front of our eyes, but nobody has a plan to stop it. Unfortunately, from a short-term perspective I don’t know if there is anything that can be done to prevent the commercial real estate bubble from imploding. Vacancy rates are surging to historic highs all over the nation, and without sufficient rental income many property owners will be forced to default.
In addition, a giant mountain of commercial real estate mortgages will be up for refinancing over the next few years, and substantially higher interest rates will make refinancing those mortgages exceedingly difficult. We really are facing a “perfect storm” for the commercial real estate industry, and the fallout is going to be absolutely devastating for U.S. banks.
This is not a small problem. Offices are sitting empty from coast to coast, and the total commercial real estate market in this country is currently valued at somewhere around 20 trillion dollars…
From Dallas and Minneapolis to New York and Los Angeles, offices sit vacant or underused, showing the staying power of the work-from-home era. But clear desks and quiet break rooms aren’t just a headache for bosses eager to gather teams in person.
Investors and regulators, on high alert for signs of trouble in the financial system following recent bank failures, are now homing in on the downturn in the $20 trillion US commercial real estate market.
The pandemic sparked a “remote work” revolution, and now we have a lot of office space that is simply not needed any longer.
In fact, office vacancies in Manhattan are now at the highest level ever recorded…
In New York’s Manhattan, office vacancies are at a record high, Bloomberg reported last week, even as new properties come online, adding even more space to the struggling market. And in Los Angeles and Chicago, office vacancies sat at 22.5% as of the fourth quarter of 2022.
This is a huge problem for property owners, because many of them don’t have enough tenants paying rent.
And as I mentioned earlier, an enormous pile of commercial mortgages “will be up for refinancing in the next couple of years”…
They are a bellwether for what is likely to come, as more than half of the $2.9 trillion in commercial mortgages will be up for refinancing in the next couple of years, according to Morgan Stanley.
“Even if current rates stay where they are, new lending rates are likely to be 3.5 to 4.5 percentage points higher than they are for many of CRE’s existing mortgages,” wrote Morgan Stanley Chief Investment Officer Lisa Shalett, in a recent report.
In the end, we are going to see an unprecedented wave of defaults and commercial property prices are going to crash really hard.
As I noted yesterday, Morgan Stanley is actually warning that commercial property prices “could fall as much as 40%”…
With small- and medium-size banks accounting for 80% of commercial real estate lending, the situation might soon get worse, says experts.
Commercial property prices could fall as much as 40% “rivaling the decline during the 2008 financial crisis,” forecast Morgan Stanley analysts.
Actually, I believe that projection is probably too optimistic.
At this point, commercial property prices are already down 15 percent from the peak of the market…
Prices in the United States were down 15% in March from their recent peak, according to data provider Green Street. The rapid increase in interest rates over the past year has been painful, since purchases of commercial buildings are typically financed with large loans.
In some markets, the carnage that we have already seen is quite breathtaking. For example, Blackstone recently sold two office towers in southern California at a 36 percent loss…
Private equity firm Blackstone sold two 13-story Class A office towers, the Griffin Towers, in Santa Ana, Orange County, California, for $82 million to a joint venture between Barker Pacific Group and Kingsbarn Realty Capital. The towers, built in 1987, have a vacancy rate of 24%.
Blackstone had bought the towers in 2014 for $129 million, according to the Commercial Observer yesterday. The selling price makes for a loss of 36%. And Blackstone was lucky on this deal.
And an office tower in Houston just sold at a loss of 47 percent…
In Houston, Parkway Property sold the 960,000-sf San Felipe Plaza in Uptown, to Sovereign Partners for $82.8 million in late March. The tower was built in 1984. Parkway Property ended up with the tower when it acquired Thomas Properties, which had bought the property in 2005 for $156.5 million. So this was a loss of 47%.
I don’t know why anyone would be willing to purchase commercial real estate at this stage.
Trying to catch a falling knife is a very dangerous thing. Of course commercial real estate is not the only bubble that is bursting.
We have already seen the crypto bubble burst, we have seen the bond bubble burst, and residential real estate prices are starting to fall all over the nation.
So far, stock prices are hanging in there, but a number of experts are warning that a big crash is just around the corner…
Legendary investor Jeremy Grantham has topped the board for an extreme prediction about US stocks. The market historian has forecasted the S&P 500 could tank as much as 50% this year to about 2,000, as an “everything bubble” bursts.
Grantham said the prices of stocks, bonds, real estate, fine art, and other investments surged to unsustainable highs during the COVID-19 pandemic.
Market experts Stephanie Pomboy and Larry McDonald echoed Grantham’s view – but with a less bearish prediction. While the pair expect stocks to crash as much as 30%, McDonald said the plunge could happen over the next two months as higher interest rates choke demand.
Our leaders were able to artificially prop up the system for a number of years, but now they have lost control.
A great financial earthquake has begun, and things are going to get really bad during the years that are in front of us.
But many people out there truly believed that the party would last forever, and so now they are in a position to get very badly burned as the system melts down all around them.
Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.
About the Author: My name is Michael and my brand new book entitled “End Times” is now available on Amazon.com. In addition to my new book I have written six other books that are available on Amazon.com including “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. (#CommissionsEarned) When you purchase any of these books you help to support the work that I am doing, and one way that you can really help is by sending copies as gifts to family and friends. Time is short, and I need help getting these warnings into the hands of as many people as possible. I have also started a brand new Substack newsletter, and I encourage you to subscribe so that you won’t miss any of the latest updates.
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Article cross-posted from The Economic Collapse Blog.
Bypass Big Tech Censors
Starting the Day With a Scripture-Inspired Roast Helps Center Your Thoughts on Eternal Truths Amid Temporal Pressures
The world can seem chaotic, especially right after we wake up. Many believers start their mornings reaching for something familiar — a hot cup of coffee — yet end up settling for mediocre brews that do little more than deliver a caffeine jolt. The daily grind of life, with its endless distractions, news cycles, and responsibilities, can leave even the most faithful feeling spiritually parched alongside their physical fatigue. What if your morning ritual could do more than wake you up? What if it could ground you in truth, nourish your body with exceptional quality, and quietly advance a kingdom purpose at the same time?
That’s the promise — and the reality — behind Promised Grounds Coffee. This Christian-founded company doesn’t just roast beans; it approaches every step as an act of worship and discipleship. By selecting only the top 10% of specialty-grade beans, ethically sourced from dedicated farmers in Central and South America, and small-batch roasting them with reverence in Austin, Texas, Promised Grounds delivers what many describe as the best coffee available — never burnt, never bland, but rich with origin stories and layered flavors that honor God’s creation.
From the vibrant Psalm 27 Roast (a light, bright medium option) to the bold yet peaceful 2 Timothy 1:7 Decaf, each bag carries a Scripture verse that turns your daily pour into a gentle reminder of faith. And through their Ounce Per Ounce Promise, every ounce of coffee you enjoy provides an equal ounce of clean water to families in need via partnership with Filter of Hope — literally brewing hope for body and soul, one cup at a time.
The challenge for today’s Christians runs deeper than finding a decent cup. In an age of convenience-driven consumerism, it’s easy to support companies that dilute values or remain silent on matters of faith. Many believers want their everyday choices — from what they drink to how they spend — to reflect discipleship rather than just convenience. Promised Grounds solves this by weaving Christian excellence into the entire process: beans nurtured with prayerful stewardship by farming families, roasted as an offering rather than a commodity, and packaged with Bible verses to encourage a mindset of gratitude and purpose from the first sip. Reviewers consistently praise the smooth, rich profiles — whether enjoyed black in a drip maker, iced on a warm day, or shared in fellowship — noting how the quality stands toe-to-toe with premium secular brands while delivering something far more meaningful.
This integration of faith and flavor addresses a real need in Christian households and ministries. Busy parents, church leaders, and remote workers alike report that starting the day with a Scripture-inspired roast helps center their thoughts on eternal truths amid temporal pressures. The coffee’s exceptional character — bright citrus notes in lighter roasts or deep chocolate undertones in bolder ones — comes from meticulous selection and careful roasting that respects the bean’s natural gifts rather than masking them. It’s the kind of coffee that elevates a simple quiet time, fuels productive workdays, or sparks meaningful conversations when shared at Bible studies or outreach events. And because it’s ethically sourced with integrity, every purchase supports sustainable livelihoods for farmers who treat their crops like family harvests.
For those leading churches or small groups, the impact multiplies. Promised Grounds offers bundles and options perfect for hospitality ministries, turning ordinary coffee service into an opportunity to point people toward the living water of Christ. Imagine greeting visitors with a warm cup whose very bag carries God’s Word — a subtle yet powerful witness that aligns with the Great Commission. The company’s Texas roots and commitment to “brewing hope” resonate especially with believers who value American enterprise paired with global compassion.
Of course, quality alone isn’t enough if the experience feels out of reach. Promised Grounds keeps it accessible with practical perks like free shipping on orders over $40, sample sets for discovering favorites, and thoughtful add-ons such as faith-themed mugs. Whether you prefer whole beans for fresh grinding, grounds for convenience, or even bulk options for larger households and ministries, the result is consistently superior coffee that makes discipleship feel integrated rather than added on.
As you consider how to align even the smallest habits with your walk with God, Promised Grounds Coffee stands out as a refreshing solution. It tackles the dual problems of subpar daily sustenance and disconnected consumption by offering a product that genuinely excels in taste while advancing a mission of clean water, farmer dignity, and scriptural encouragement. Believers who make the switch often describe it as more than a beverage upgrade — it becomes part of their rhythm of gratitude, a daily invitation to remember that every good gift comes from above.
If you’re ready to transform your mornings (and perhaps your church gatherings) with coffee that honors both exceptional craftsmanship and Christian values, I encourage you to explore what Promised Grounds has to offer. One sip at a time, you’ll be nourishing your body, refreshing your spirit, and participating in something far greater — all while enjoying what truly is among the best coffee available.