If you invest in the property market, Shark Tank star Barbara Corcoran has some bad news for you: the market “is going to be a bloodbath.”
Earlier this week Twitter and Tesla CEO Elon Musk tweeted: “Commercial real estate is melting down fast.” Musk has developed a reputation as being quirky and downright weird at times, so you may have taken his warning as another example of his hyperbolic style, but Corcoran has credibility.
Speaking to FOX Business’ The Claman Countdown this week, Corcoran—who sold her New York real estate brokerage for $66 million in 2001—said there isn’t enough confidence in the commercial property market post-pandemic.
Despite mandates from big businesses like Google, Amazon and most recently Meta, swathes of office blocks across the U.S. are still lying partially empty.
According to data from security provider Kastle the average occupancy of offices across America is at just under 50%—with the New York metropolitan area seeing some of the lowest rates of tenancy.
“No one really believes it’s going to turn the corner,” Corcoran said. “People are staying home. Our best office buildings in midtown Manhattan are 50% occupied, and in most major cities or in secondary cities, we have a 20% vacancy rate. No one wants to take that chance.”
She added that with turbulent economic times ahead she expects to see more businesses defaulting on their loans or mortgages—an issue which will trickle back to regional banks.
Corcoran’s theory is in line with the data: UBS said in April it expects to see more defaults on real estate loans as a result of an expected credit crunch.
“I don’t see that turning around,” the Shark Tank star said. “I think it’s going to be a bit of a bloodbath before it gets better.”