27% profits every 20 days?
This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.
Distress is rapidly spreading in the U.S. commercial real estate industry, with the volume of troubled assets escalating to nearly $64 billion in the first quarter of 2023, a 10% rise from the previous quarter.
This alarming trend is highlighted in a recent report from MSCI Real Assets, which also warns of an additional $155 billion of commercial property assets teetering on the brink of distress.
The report further revealed retail properties, including malls, were the most troubled type of real estate, with nearly $23 billion of distressed assets tied to the sector.
Office buildings, struggling with weaker demand due to the rise in remote work and job cuts, accounted for nearly $43 billion of potential distress, the most of any sector.
Manhattan was the most active market for distressed asset sales, with $2.6 billion of deals, or 19% of U.S. transactions, in the 12 months through May.
Apocalypse Hits Offices Causing A Surge In CRE Loan Delinquencies
According to a New York Post article, the inflation wave and the new era of remote work are creating a global commercial real estate "apocalypse" where properties sit vacant and owners with loans coming due hand their keys back to lenders.
The article quotes Harold Bordwin, a managing director at Keen-Summit Capital Partners, who stated that even if a building has the same tenants and income as it did three years ago, if its debt is maturing today, it has a real problem.
Adding to the crisis, a report from S&P Global Market Intelligence showed 576 American banks had exceeded regulatory guidelines on commercial real estate loan concentrations, a 30% increase from a year ago. This overexposure comes at a time when commercial real estate loan delinquencies are on the rise, with the first quarter of 2023 seeing a sharp increase to 0.77%.
5 Real Estate Stocks To Watch
Here are five stocks that have significant exposure to the commercial real estate market and could be impacted by the current trends:
- SL Green Realty Corp. (NYSE:SLG): This is a leading real estate investment trust (REIT) that focuses on owning, managing and developing commercial properties in New York City.
- Hudson Pacific Properties, Inc. (NYSE:HPP): This company specializes in acquiring, repositioning and operating office and studio properties in West Coast markets.
- Vornado Realty Trust (NYSE:VNO): Vornado is one of the largest owners and managers of commercial real estate in the U.S., with a diverse portfolio of office, retail, and residential properties.
- Office Properties Income Trust (NASDAQ:OPI): This REIT owns and operates a portfolio of office buildings primarily leased to government tenants across the U.S.
- Douglas Emmett Inc (NYSE:DEI): This real estate investment and property management company has a focus on office and multifamily properties in high-demand markets such as Los Angeles and Honolulu.
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: Unsplash
27% profits every 20 days?
This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.
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