For property owners, rising interest rates bring back uncomfortable memories of the years leading up to the 2008 financial crisis. Commercial landlords who learned useful lessons about debt since then—except to carry less of it—face a slow reckoning.
While interest rates have been rising faster in the U.S., Europe’s real estate owners look more vulnerable to pricier debt. Listed property stocks in the euro area carry net borrowings of 14 times their projected earnings before interest, taxes, depreciation and amortization on average, according to Bank of America, compared with six times in the U.S.
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