Elon Musk is right about commercial office space, says property mogul and Shark Tank star Barbara Corcoran. “All hell is going to break loose,” she says.
If you own a lot of business property, Barbara Corcoran from Shark Tank has terrible news: the market will get much worse before it gets better.
It will be a “bloodbath.”
Elon Musk, the CEO of Tesla and owner of Twitter, wrote earlier this week, “Commercial real estate is melting down fast.” Corcoran said the same thing.
Corcoran, who sold her New York real estate brokerage for $66 million in 2001, said this week on The Claman Countdown on FOX Business that there isn’t enough trust in the commercial property market after the pandemic.
Even though Google, Amazon, and, most recently, Meta has told office buildings across the U.S. to fill up, many are still mostly empty.
Security company Kastle says that the average occupancy rate of businesses in the United States is just under 50%, with some of the lowest rates in the New York metropolitan area.
Corcoran said, “No one thinks it’s going to turn the corner.” “People don’t leave their homes. In midtown Manhattan, 50% of our best office buildings are full, and in most big and secondary cities, 20% are empty. No one is willing to take that risk.”
She also said that she thinks more businesses will stop paying back their loans or mortgages when the economy gets rough, hurting area banks.
Corcoran’s idea is in line with the facts. In April, UBS said it expects a credit crunch to lead to more real estate loans defaulting.
The Shark Tank star said, “I don’t see that going the other way.” “I think things will get worse before they get better.”
It’s an emergency. Elon Musk has sounded the alarm more than once. His warning this week, in response to Craft Ventures founder David Sacks’s comment that a lot of debt in the sector was about to come due was just the latest.
In March, the father of SpaceX replied to a tweet about real estate debt by saying, “This is by far the biggest problem I see coming.” So do mortgages.
