Kyle Bass Predicts Banks Could Lose Quarter Trillion Dollars in Office Market Collapse

The financial market’s March panic over regional banks’ exposure to the struggling commercial real estate and office sectors is now forgotten, but the underlying fundamentals have worsened. Kyle Bass predicts the US banking industry will lose hundreds of billions of dollars due to office market exposure. He expects a 10% hit to US banking equity. Morgan Stanley also foresees significant declines in commercial real estate prices, especially for office space, expecting a 27.4% drop from peak to trough in 18-24 months.