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Charlie Munger, a close friend of Warren Buffett and vice chairman of Berkshire Hathaway, told the Financial Times that banks are burdened with "bad loans," which are causing a storm to brew in the US commercial real estate market amid dropping prices.
Mr. Munger stated, "We have a lot of distressed office buildings, a lot of distressed shopping centers, and a lot of other distressed properties." He added the real estate market was "in agony". However, he also noted that the situation is "nowhere near as bad as it was in 2008". The banking sector is experiencing issues like any other industry, according to Munger.
According to him, banks are already less eager to lend to commercial builders. The investor added that there are "too many problems" with such loans and that "every bank in the country has become much more cautious with real estate loans than even six months ago."
source: ft.com
Mr. Munger stated, "We have a lot of distressed office buildings, a lot of distressed shopping centers, and a lot of other distressed properties." He added the real estate market was "in agony". However, he also noted that the situation is "nowhere near as bad as it was in 2008". The banking sector is experiencing issues like any other industry, according to Munger.
According to him, banks are already less eager to lend to commercial builders. The investor added that there are "too many problems" with such loans and that "every bank in the country has become much more cautious with real estate loans than even six months ago."
source: ft.com