Episode Details

The national CMBS distress headline says recovery. 

10.9% in August, down from 11.5% a year ago. But when you drill down, it's completely fractured. Chicago at 25.3% (double the national average). Cleveland 22.5%. Milwaukee 22.4%. Meanwhile, San Diego 0.3%, Boston 5.6%, Tampa 6%. Office distress runs 16%, drives stress in 8 of 11 metros. Aon Center: $536M original, $824M appraised, $195M today. Matured July. Extension denied. Full writedown. New York curing $6.1B in loans (rate down to 9.6%). Midwest office cores deteriorating. National averages hide regional reality. Philadelphia's Market Street West = 40% of metro distress. One building, but underneath the bifurcation, U.S. construction spending jumped 0.9% to $2.2T in August. Beat 0.1% forecast by 9x. Private construction $1.66T (up 1.1%). Residential $882.3B (up 1.1%). Highway $150.6B. Schools $113.1B. Industrial pipeline expanding. Housing shortage: 10 million missing units (White House). While office implodes regionally, residential and industrial are getting capital and getting built. Winners consolidate. Losers look like Aon Center. One data point changes everything. One city changes the narrative.