TSX:REI.UN - Post by User
Comment by
Mousernanon Jun 22, 2022 11:17am
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Post# 34774007
RE:RE:RE:RE:RE:MIND BOGGLING
RE:RE:RE:RE:RE:MIND BOGGLINGFor anyone who has beheld the growth of the Manhattan skyline in recent years, barely even slowed by Covid-19, this is alarming. The travails of Vornado Realty Trust, one of the biggest developers in New York, whose share price is 59.5% below its high from five years ago, suggest the scale of the issue; the fact that a number of developers only narrowly fended off industrial action by building staff earlier this year also indicates the pressure. There is a lot of capacity which was planned on the assumption that demand for office space would continue at pre-pandemic rates. That no longer looks a good premise. The fall in REIT prices shows that the concerns are already covered to an extent in the price, but the impact of a large office property developer defaulting on its loans would be painful.
The issue isn’t restricted to the US. European office property isn’t so overblown, and hasn’t suffered quite so much since the pandemic, but the FTSE indexes for euro zone and UK office REITs, denominated here in euro, show similar problems at work: