Malls are experiencing “real reinvention”

The commercial real estate sector has been under a microscope Following the collapse of Silicon Valley Bank. A new report from Moody’s explains why banking turmoil mixed with rising interest rates This could make you vulnerable.

Moody’s Analytics Head of CRE Economic Analysis Kevin Fagan told Yahoo Finance Live that despite concerns surrounding office buildings, he’s focused on another space.

“It’s malls that really have experienced the most pain. They’re going through a real reinvention, akin to what some offices are going to have to go through,” he says.

Despite a difficult post-pandemic stretch, Fagan says that hotels are “one of the only positive stories right now.”

“They’ve really ridden the wave of revenge travel,” he adds, but warns that a bumpy ride could still be ahead. “If the economy turns down, don’t be surprised if hotel does as well,” he explains.

You can also watch Rachelle AkuffoKevin Fagan’s complete interview here.

The Key Moments of an Interview:

00:00:14

00:00.29 – Only positive hotels

Video Transcript

– The multifamily sector can experience some surprising price corrections. The pricing is too tight for such a strong asset. Industrial has been strong. Surprisingly, retail has been very strong. The malls have suffered the most. They are going through a complete reinvention similar to what offices will have to go through. The kind of

The normal neighborhood shopping centers are doing well. They seem to bounce all over the place, even hotels. Surprisingly hotels are the only positive story right now. After COVID, they were hit the hardest of any industry, including hospitality. They’ve made a huge comeback. They have ridden the wave that is still causing them to be resentful. TSA numbers in 2019 are 110% higher than they were in 2019. The sector is actually performing well right now, however it’s very pro-cyclical. Don’t be surprised if the economy slows down.