Not that it should come as a surprise, but this market is now following the home real estate market as well as the general economy. As if the banks don't have enough problems on their hands with the real estate boom and credit card deb problems. CNBC:
Commercial real estate could soon make big trouble for the market. It’s been linked to a string of negative developments and now REITs are tumbling.The values of commercial real estate are not insignificant and loan terms tend to be very different than for housing because commercial terms are shorter. The banks - including Goldman - are not out of the woods, yet.
Shares of Boston Properties closed significantly lower on Tuesday as did Simon Property Group as well as the iShares Dow Jones US Real Estate ETF which tracks the sector.
The moves come after Goldman Sachs blamed commercial real estate as a major factor for their most recent losses. And those losses could be mounting.
