There’s Something Nasty Brewing in Europe

Theodora Lee Joseph

6 days ago1:38 min

There’s Something Nasty Brewing in Europe

If you look at the world’s major stock markets, 2023 has started off with an absolute spring in its step. But if you look at this corner of Europe’s real estate market, it’s limping pretty noticeably. According to data compiled by Bloomberg, almost $175 billion of commercial real estate credit is “distressed” – meaning that these loans are unlikely to be paid back. That may be a sliver of Europe’s total real estate bond market, but it’s roughly four times more than what’s being seen in other industries. And it’s only likely to get worse, as interest rates continue to rise and real estate valuations fall.

See, when valuations decline, they place more stress on such debt, since real estate loans are usually secured against the value of properties. Falling real estate values can result in fo

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