The commercial property crash in the UK's secret crisis. Prices are tanking, and the banks, who are up to their neck on commmercial property loans, must be in a state of red-eyed sleepless panic. Things are bad out there.
Consider this short story from Bloomberg:
"LaSalle Investment Management put Condor House, a seven-story office building facing London's St. Paul's Cathedral, on the market for 130 million pounds ($256 million) six months ago. The building sold last month for about 117 million pounds, 10 percent below the asking price."
Think how a 10 percent decline in asset prices would affect the value of loan collateral. Peter Hobbs, head of a real estate research outfit based in London neatly summed up the situation:
"The U.K. market is falling apart. There's a risk that this cyclical downturn turns into something worse."
Something worse? What could he be thinking about? Could he be thinking about a banking crisis?