Commercial Real Estate Crisis: Empty Towers, Rising Delinquencies, and the Next Bailout

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Midtown skyscrapers sit vacant, commercial real estate delinquencies hit record highs, and banks quietly sit on toxic paper. At nearly 12% delinquency—higher than the 2008 financial crisis—the system is on borrowed time. When it all unravels, expect the same script as always: taxpayer-funded bailouts, media spin, and lectures about why saving reckless banks is “in our best interest.”

Episode Transcript

Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.

Speaker 2 (00:16):
All right, yeah, commercial real estate delinquency disaster something that
we have warned you about. I got back to the
States and I had to spend a couple days in
New York City. My hotel was in Midtown Manhattan, and
as I look out the window of my Midtown Manhattan
hotel at the other high rise buildings all around me,

(00:38):
many of these buildings not pre war, not old, something
fairly new. What did I notice? Empty? Nothing, entire buildings,
brand new buildings with nothing, nobody in them, no office furniture,
no nothing. Now what I'm saying, Okay, obviously that's anecdotal.

(01:05):
That's anecdotal. And one could say, well, do I mean
you can't, you can't. E strap alaid that over the
United States. You're right, I can't, but I can this.
The office CNBS commercial mortgage backed security delinquency rate right
now is at a the highest level ever. Yeah. Yeah,

(01:27):
we're almost at twelve percent at this point and time
during the financial crisis, I think it topped out at
around ten point eight percent. Now, again, I couldn't tell you.

(01:48):
I couldn't tell you what's going on behind the scenes.
When it comes to all of this bad paper that's
out there, but it's sitting on the books of banks,
I find it hard to believe that they are actually
pricing this paper properly, because if they did, we would

(02:09):
have a cascade of bank failures. In particular, lot of
mid size to smaller banks all around the country that
are holding onto this, not to mention many private equity
companies as well. So basically we're living on borrowed time

(02:29):
when it comes to this. Eventually, eventually it's going to
fall apart, and you know probably what we'll see happen
if it's the case. I know it's a lot going
on right now. They probably want to push this down
the road as far as they can is we'll do
like we've done the last time. We'll get a tax
payer bailout of these banks, and we'll be told that

(02:52):
it's in the best interest of the country not to
let these banks fail, and oh my god, it's going
to be terrible in job losses and the sky's going
to fall, the world's gonna end. It's going to be terrible.
Just like if they sell everything else they'll get. They'll
get the various different siccophants that they have at every

(03:15):
media network out there. They will pay influencers now, because
that's how they're doing business. They'll they'll pay people to
go online on the various different platforms to talk about
the wonders of government intervention and solving all of these problems.
They did it not long ago. It's Silicon Valley Bank
for crying out loud. Yes, yes, that wasn't our best

(03:38):
interest because we had to bail out all of those
multi millionaires and billionaires that had great deals at Silicon
Valley Bank. And uh yep, they didn't have to pay
any attention whatsoever to making sure that their books are straight. Again,
what's the point if you're a bank? Well, why do
what's prudent? Why? I md you just can they get

(04:00):
bailed out? Again? Think about this for a second. We're
almost at twelve percent delinquency rates taxpayers again, get ready
to assume the position watchdog on Wall Street dot Com