Banks’ real estate losses will be hyperlocal

Occupancy issues: A Starbucks location inside an office tower at 201 Spear Street in the financial district of San Francisco. Office use in the US hasn’t recovered from the Covid-19 pandemic as people persist in working from home. — Bloomberg

THE sense of impending doom in commercial property is almost inescapable in the United States and Europe, but evidence of actual disaster is scant.

Real estate experts and investors who specialise in distressed assets think it’s only a matter of time before landlords and lenders must face reality and yet finance officials like US Treasury secretary Janet Yellen say problems are manageable.