October 7, 2022
NewsTreason.com Commentary:
I’ve been arguing with the sleepers about this very topic for over two years. Sadly most people don’t understand how commercial real estate is valued. It is based on occupancy rates and the resulting profitability of the property after expenses. In theory, all else equal, if the occupancy and revenue of a building drops by 40%, you’ll see a similar drop in the expected value of that property.
However, unlike stocks or bonds, commercial real estate valuations are not routinely updated. It is not until a property is “marked-to-market”, that the current value is reflected. Depending on the type of ownership of the building (single private owner, real estate investment trust, mutual fund, etc) that “mark” could go years without being updated.
So, after the PLANDemic, the smart money well-knew that plummeting occupancy rates in Cities like NY wouldn’t be reflected for quite some time. This meant that banks, investment firms, pension funds and 401k’s with exposure to commercial real estate were all holding properties on the books that were artificially inflated by 30%, 40% or even more because the property valued had yet to be adjusted (marked-to-market) for the crash in occupancy.
Now, as this process plays out, you’ll see the blood on the streets in urban commercial real estate. Another hit to the already crumbling US Financial system.
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