Fed Chair Jerome Powell and Treasury Secretary Janet Yellen have both confirmed we will have a commercial real estate debacle on our hands soon.  Great, they finally figured out what Manny and Adam have been saying for over a year!  Better late than remaining ignorant!  So what does this mean for you?

This podcast explains the risks this is creating for CRE owners and banks with loans on these properties.  And those risks will impact regional banks most, which are the banks that also mostly serve small and mid-size businesses.  If they lose their reserves, they can’t loan to the small guy.  Worse, if those banks fail (like our leaders finally admit is likely) it means real estate prices collapse, bankruptcies – and a lot of empty space on the market at low prices.  It means you can plan for lower real estate costs to help you be more successful, and lots of opportunities for conversions into more valuable space (think residential) for offices.

Further, this podcast delves back into the ways demographics feed this very predictable scenario. And how those demographics are affecting all businesses looking to hire for more growth.  Future scenarios have to include these remarkable trends toward too much space, and simultaneously too little labor!

Thinking Points:

• Have you planned out your real estate needs for the next 5-10 years, including factoring in the big changes in how we work?
• Have you worked through what you’ll do if your current bank is swamped by real estate losses, can no longer loan or even goes bankrupt?
• Have you explored opportunities to grow by taking advantage of cheaper real estate?
• Are you hoping you can hire in the future, or building plans that address the totally predictable long-term labor shortage

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