Over the past several months we’ve seen a series of progressively negative headlines over commercial real estate – predictions becoming more and more dire.

Hartnett: Commercial Real Estate Is The Next Shoe To Drop (subscribers only, really all you need to know…)

Echoes Of New Century’s Collapse Amid Sudden Firesale Of Real Estate Loans As Morgan Stanley Sees 40% Downside (subscribers only)

Commercial Real Estate Faces Perfect Storm: The Demise Of Downtown Office Buildings

A Record 30% Of San Francisco Office Space Is Vacant

Blackstone, of course, is waiting with dry powder for the “largest ever” real estate drawdown.

Now, according to one CEO of a real estate investment firm, things could get as bad as what was seen during the 2008 financial crisis.

“Unfortunately in the situation we’re in, things need to bottom out, and they haven’t bottomed out yet,” said Patrick Carroll, the CEO of the real estate investing firm Carroll, in a Thursday interview with, adding that while some areas of CRE could remain intact, such as multifamily housing, areas such as offices and hotels could be “destroyed,” as the sector grapples with tighter credit conditions and a cascade of debt maturities.

“It’s going to be ugly. It’s going to be at least as bad as ’08, ’09,” he warned.

https://www.youtube.com/embed/e6VWZF6hQnE

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One of the core issues is that commercial mortgage debt held by banks will need to be refinanced in much tougher conditions in the coming years – as around 80% of outstanding commercial property debt is held by small and medium-sized banks.

“Sellers are not realizing how much their properties have lost value, and they’re not willing to dump their properties yet because they haven’t felt enough pain. They’re about to start feeling pain. These lenders are screwed,” said Carroll, who noted that $1.5 trillion in commercial real estate debt will come due in the next three years – which will either need to be refinanced or renegotiated.

And with the collapse of SVB and other small banks feeling the pressure, many will be less inclined to lend without doing so at much higher interest rates than the commercial real estate market is used to.