Big Take: Housing Market Woes Have Finally Arrived for Commercial Real Estate
The slump in the world’s biggest asset class — property — has spread from the housing market to commercial real estate, threatening to unleash waves of turmoil across the economy. Almost $175 billion of debt tied to offices, malls, theme parks and more is already distressed — roughly four times more than the next biggest industry. It will bring pain for everyone.
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The price of everything is going up, but few things have risen as fast as rent. The rule of thumb used to be that housing shouldn’t eat up more than a third of your paycheck. But these days, a lot of people are handing over half or more of their income to their landlord. Bloomberg reporters Neil Callanan and Prashant Gopal weigh in on what’s happening, why, and if there’s any relief in sight.