Business owners may not want to think about how rising interest rates will impact their bottom lines. Soon, they won’t have a choice.
When the bill comes due on billions of dollars of commercial real estate, Hedgeye analyst Josh Steiner says it will create “under-appreciated and real problems.”
“There’s this sort of game that’s going on, which is ‘kick the can.’ In Financials, you call it ‘extend and pretend’: extend the loan and pretend everything’s going to be okay,” Steiner explains in this clip from The Macro Show. “That goes on, really up until it matures, then you get basically a catalytic event.”
That event is just around the corner, with $175 billion in office debt maturing this year, and another $150 billion next year.
“You’re going to have north of a third of a trillion dollars maturing over the next 18 months in the office space,” Steiner adds. “So, I think it’s going to be a problem.”
Watch the full clip above.
