The Legoland Korea theme park in Chuncheon in 2022.
Photographer: Woohae Cho/Bloomberg
The Big Take
Global Property Market Faces $175 Billion Debt Spiral
A sharp drop in commercial real estate is bleeding into the real economy.
The slump in the world’s biggest asset class has spread from the housing market to commercial real estate, threatening to unleash waves of credit turmoil across the economy.
Almost $175 billion of real estate credit is already distressed, according to data compiled by Bloomberg — about four times more than the next biggest industry. As the toll from higher interest rates and the end of easy money mounts, many real estate markets are almost frozen with some lenders telling borrowers to sell assets or risk foreclosure amid demands for additional capital from landlords.