This Part of the Market Is About to Explode: Three Warning Signs

[Intelligent Income Daily]( Welcome to Intelligent Income Daily, the free daily newsletter from wealth and income expert Brad Thomas. Brad’s experience spans three decades of real estate and stock market booms and busts. Today, he and his team focus exclusively on the safest and most predictable ways to earn sustainable and growing income in any market condition. You can find all past issues [here](. And if you have any questions, please contact Brad and his team [here](mailto:memberservices@widemoatresearch.com). This Part of the Market Is About to Explode: Three Warning Signs By Brad Thomas, Editor, Intelligent Income Daily Time is running out for the commercial real estate (CRE) sector. The ticking time bomb hidden deep within this sector is showing increasing signs that detonation day is fast approaching. Yesterday, another well-known retail store announced that it was closing nine stores across four states. And the reason is extremely concerning. Today, I’ll share what that reason is, its significance, and why it is just one of three major warning signs that the commercial real estate market is about to explode. I’ll also give you [one last opportunity to hear my colleague Stephen Hester walk you through how to prepare and profit from the upcoming explosion](. And for those who tune in before midnight tonight, I have a special offer for you. So read on to find out what it is… Recommended Link [Access Ending Midnight Tonight [REPLAY]]( [image]( Starting as soon as November 30th, the tech world and financial markets will Be rocked by a crisis more than a decade in the making. According to one leading expert, it will be like someone has lobbed a nuclear bomb into the heart of Silicon Valley. You can sit idly by and be blindsided, or you can turn a crisis into the opportunity to make 10x in the weeks ahead. On Monday, Brad Thomas and his special guest laid out all the details. [Click here now to see a replay before it’s too late.]( -- A Major Retail Store Closing Multiple Stores Target (TGT) made a huge announcement yesterday. The nine stores across four states it’s closing are all due to out-of-control theft. And Target is not taking its time about it. Before the end of October, those locations will no longer be operating. In Target’s own words, “We cannot continue operating these stores” due to “theft and organized retail crime.” It is no longer safe for shoppers and employees alike, and unsustainable for their balance sheet. Although Target believes it serves an “important role” in the communities it serves, it “can only be successful if the working and shopping environment is safe for all.” Sadly, Target is not alone... Walmart also closed multiple store locations this year. And other retailers such as Home Depot, Lowe’s, Dollar Tree, Dick’s Sporting Goods, and Ulta – all reported a large increase in crime and stolen merchandise. These stores cannot afford such major hits to their balance sheet over the long term. And the problem is bigger than most people know. Warning Sign #1: Crime Rising Across CRE The National Retail Federation recently reported that retailers’ lost inventory, a category that includes damaged and stolen goods, rose from $93.9 billion in 2021 to $112.1 billion in 2022. And 2023 will likely beat even that. I interviewed Brian Harris, CEO of Ladder Capital – a mortgage real estate investment trust, or mREIT, that helps finance property growth – earlier this week. And he agreed that crime is taking a toll on real estate. It’s not the properties, their owners, or renters’ fault, he pointed out. But they are paying the price regardless. And when commercial real estate balance sheets start taking major hits they weren’t expecting… it’s a lot harder to pay off any debt that is coming due. Warning Sign #2: CRE Loans Coming Due As I’ve been [mentioning for weeks]( the debt coming due for the commercial real estate sector is one of the biggest warning signs that a CRE crash is imminent. According to the Mortgage Bankers Association’s estimates, $728 billion (16%) of all commercial and multifamily mortgages will mature this year, with another $659 billion (15%) piling on in 2024. All this so soon after the 2020 shutdowns depleted so many CRE owners’ ability to save. Knowing that, you’d better believe that lenders are going to be pickier about who they do business with and how. In which case, expect heightened defaults and foreclosures from here. Warning Sign #3: CRE’s Enormous Interest Rate Problem Amid all this, commercial real estate has a third problem in the form of interest rates. When those go up, it’s only natural that values go down. Most of the time, CRE owners can prepare appropriately for that kind of business environment. But interest rates have risen very high very fast this time around… And after months and months of initial assurances from the Fed that no such thing would be necessary. (Does anyone remember “transitory” inflation?) This is especially problematic for the office sector, where fundamentals are far from recovered. The retail and even hotel categories have bounced back much more strongly than expected since the economy reopened. But office buildings continue to struggle, especially in major metropolitan hubs like New York City, San Francisco, and Washington D.C. This brings us right back to foreclosures… Under the current rising rate conditions where savers are increasingly rewarded and borrowers are increasingly burdened, it’s just one more challenge for companies to service their floating-rate debt. Already, the last nine months have seen the pace of defaults and distressed exchanges hit multi-year record levels. And if the Fed does indeed raise rates even just one more time… Well, things will only get more difficult from here. CRE vacancies will rise across the board, even in strong sectors like industrials, or warehouses. And certain areas of the country will likely suffer more than others. It’s Time to Prepare That’s not to say opportunities to profit have all disappeared. There are still pockets of safety out there, if you know where to look. But I do recommend you exert additional caution going forward. Which is why Stephen and I recorded an urgent briefing about the culmination of these very factors I laid out for you today – and which all my research and contacts are confirming… We lay out all the potential sectors at risk… And better yet, share how you can profit from the chaos that’s brewing just under the surface. But the chance to hear about this opportunity is running out. At midnight tonight, this video will be taken offline. [So tune in while you can to inform yourself… and prepare](. And in the meantime… This story is far from over. So stay tuned. We’re sure we’ll have plenty more to report ahead… Happy SWAN (sleep well at night) investing, Brad Thomas Editor, Intelligent Income Daily IN CASE YOU MISSED IT… [Biden to Reset Your U.S. Dollars on November 1st?]( [Is the Biden Administration planning to wipe out the savings of millions of Americans?]( …And will national banks like Citibank, Wells Fargo, and Bank of America be replaced with ONE singular controlled Federal bank? Teeka Tiwari, a former Wall Street Vice President, says: “The ruling elites have weaponized the banking system to enforce their new devastating agenda against the American people…. The current banking crisis is just the beginning of a more [sinister plot to take control of YOUR U.S. dollars…]( Prepare BEFORE November 1st, or risk losing your entire savings.” [Click Here for Details.]( [image]( [Wide Moat Research]( Wide Moat Research 55 NE 5th Avenue, Delray Beach, FL 33483 [www.widemoatresearch.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Wide Moat Research welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-888-415-6046, Mon–Fri, 9am–5pm ET, or email us [here](mailto:feedback@widemoatresearch.com). © 2023 Wide Moat Research. All rights reserved. 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