Danny Newton

Elephant in the Stress Test Room: Commercial Real Estate Loans

Does anyone know the time frame for the stress test ? Is the stress test modeling five years , ten years out??
I think a major holder of empty and unused commercial property is county and city governments that have built speculative buildings to attract the next factory. The state of Tennessee has over 84 square miles of land and there are at least 1200 properties that have existing buildings that are advertised. Most of that is going to be paid for by tax money. One County in Tennessee just bought options for a 1630 acre mega park at a cost of over a million dollars a year. The options are about 6% of the asking price. This massive stock of land and buildings is in competition with privately held properties and is depressing both leases values and purchase prices.