Skip to content
  • Industry
    • Residential
    • Office
    • Retail
    • Industrial
    • Hospitality
    • Land
    • Healthcare
    • Life Sciences
    • Special Purpose
    • Mixed-Use
  • Markets
    • Los Angeles
    • New York City
    • Manhattan
    • Queens
    • Bronx
    • National
    • Washington DC
    • South Florida
  • Leases
    • Office Leases
    • Ground Lease
    • Sublease
    • Tenant Talk
    • Deals of the Week
    • All Leases
  • Finance
    • Acquisition
    • CMBS
    • Construction Financing
    • Distress
    • Refinance
    • Deals of the Week
    • All Finance
  • Investments
    • Development Site Sale
    • Portfolio Sale
    • Sale-Leaseback
    • Value-Add
    • Deals of the Week
    • All Sales
  • Development
    • Architecture
    • Construction
    • Conversion
    • Redevelopment
    • Sustainability
    • All Development
  • Capital Markets
    • Alternative Lending
    • Earnings
    • Economy
    • Foreign Investments
    • Private Credit
    • Private Equity
    • Public Markets
    • REITs
    • All Capital Markets
  • Tech
  • Weekly Issue
  • Events
  • Power
  • More
    • Players
    • Legal
    • Policy
    • Features
    • Research & Analysis
    • Columnists
    • Partner Insights
    • Transportation
    • Videos
Log In Sign Up My Account Log Out
  • Account Details
  • Email Preferences
  • Member FAQs
  • Logout
Commercial Observer
  • Industry
  • Residential
    • Multifamily
    • Homebuilding
    • Condo
    • Hotel Condo
    • Student Housing
    • Single-Family Rental
    • Short-Term Rental
    • Senior Living
  • Office
    • Coworking
    • Flex
  • Retail
    • Shopping Centers
    • Outlet/Factory Malls
    • Supermarkets/Grocery Stores
    • Showrooms/Dealerships
    • Street Retail
  • Industrial
    • Data Centers
    • Distribution Centers
    • Industrial Outdoor Storage
    • Manufacturing
    • Self-Storage
    • Studios/Soundstages
    • Warehouse
  • Hospitality
    • Casinos
    • Convention Centers
    • Hotel/Resort
    • Restaurants
  • Land
    • Farm Land
    • Parking Lots
  • Healthcare
    • Hospitals
    • Medical Offices
    • Nursing Homes & Assisted Living
  • Life Sciences
  • Special Purpose
    • Air Rights
    • Arenas/Stadiums
    • Development Rights
    • Educational
    • Government/Military
    • Museums
    • Place of Worship
    • Theaters
  • Infrastructure
    • Airports
    • Bridges/Tunnels
    • Highways
    • Railways
  • Mixed-Use
  • Markets
    • Los Angeles
    • New York City
    • Manhattan
    • Queens
    • Bronx
    • National
    • Washington DC
    • South Florida
  • Leases
    • Office Leases
    • Ground Lease
    • Sublease
    • Tenant Talk
    • Deals of the Week
    • All
  • Finance
    • Acquisition
    • Construction Financing
    • CMBS
    • Distress
    • Refinance
    • Deals of the Week
    • All
  • Investments & Sales
    • Development Site Sale
    • Portfolio Sale
    • Sale-Leaseback
    • Value-Add
    • Deals of the Week
    • All
  • Development
    • Architecture
    • Construction
    • Conversion
    • Redevelopment
    • Sustainability
    • All
  • Capital Markets
    • Alternative Lending
    • Earnings
    • Economy
    • Foreign Investments
    • Private Credit
    • Private Equity
    • Public Markets
    • REITs
    • All
  • Technology
  • Policy
    • Housing
    • Transportation
    • Urban Planning
    • Zoning
  • Legal
  • Weekly Issue
  • Events
  • Power Series
  • More
    • Features
    • Columnists
    • Research & Analysis
    • Partner Insights
    • Players
    • Videos
  • Advertise
  • Contact
  • Reprints
  • Newsletters
  • Power Finance
  • Power 100
  • Owners Magazine
Log In Sign Up My Account Log Out
  • Account Details
  • Email Preferences
  • Member FAQs
  • Logout
  • © 2025 Observer Media · Terms · Privacy

Industry
National
Finance   ·   Economy

Presented By: Partner Insights

Seeing the Signs and Avoiding Risk: How to Best Position Your Company for a Downturn

By Partner Insights October 29, 2019 11:17 am
reprints


During a recent webinar on warning signs and preparations for a potential downturn, Brian Ward, Global CEO of Trimont Real Estate Advisors and the event’s moderator, proposed a significant potential change in the nature of today’s economic cycle, wondering if “credit is driving the cycles these days rather than the more traditional business cycle.”

“In addition to rising sovereign debt issues, you’ve also got rising corporate debt, trade and FX issues,” he said during the webinar, which was hosted by Commercial Observer’s Partner Insights team, while citing the US’ stalling GDP growth and falling Treasuries around the world as significant related factors. “We have about $5.5 trillion of riskier corporate debt today, about $1.3 trillion of that in leveraged loans, $1.2 trillion in junk bonds, and $3 trillion that’s just barely investment grade and, a lot of people think, somewhat questionable. These massive increases in corporate credit, combined with the sovereign credit and the other concerns noted above, give rise to some real concerns.”

SEE ALSO: Deutsche Bank, Barclays Refi Industrial Portfolio With $700M CMBS Loan

The discussion hit on many of the current reasons for concern about the economy.

Mark Weibel, partner at Thompson & Knight, said that the number of calls his company receives these days regarding structuring issues mimics the last two cycles. “There’s a lot of structuring going on right now to extend issues, or distress,” he said, “and hopefully the central bank will have something they can do, or the market can do to correct itself quickly, because there is stress in the market. People are looking to the central bank to help work through this cycle.” Ward and fellow panelist Sam Chandan, NYU Schack Institute Dean & Silverstein Chair and Wharton Professor, were not convinced that the central bank was the correct approach.

Chandan mentioned a school of thought that asks whether, as we move further away from the global financial crisis, more risk is being undertaken in an effort to generate yield. He stated a belief that “part of what [economists] are signaling is an expectation that we will observe some period of contraction or significant weakness in the global economy within the next two- to three-year time frame.” According to economists, he said, “the potential for a recession is quite real.”

Discussing monetary policy, Chandan recalled how the Fed raised interest rates rapidly over the past few years to build up monetary policy capacity—which is now limited by pressure to lower rates—and said that “the Fed’s own analysis of the effectiveness of something like quantitative easing is that it was fairly limited.”

Mentioning the possibility of tax cuts, he said, “when we look at how tax cuts have translated into increased consumer spending, we would need something fairly targeted toward moderate and low-income consumers to encourage spending at that end of things.” Chandan noted that protectionist policies have the potential to “elongate the downturn and make it a little tougher to pull ourselves out.” but also made the point that despite the fears and red flags about the end of the cycle, “overall the labor market is actually quite strong,” as “there are more jobs open and available today in the United States than there have ever been.”

Answering participant questions about risk avoidance toward the end of the webinar, Ward summed things up by noting that “while taking on leverage is tempting right now because debt is cheap, one should be careful about taking on a ton of leverage.” He also reminded participants that “like all cycles, the triggers that create problems … don’t play out exactly as [they did] the last time. So be mindful that the troubles that may come [could] come from directions no one foresaw.”

Brian Ward, Mark Weibel, NYU Schack Institute Dean & Silverstein Chair, Sam Chandan, Sponsored, sponsored-link, Thompson & Knight, Wharton Professor, Trimont Real Estate Advisors
 
Trending Stories
Office · Leases
California

Evoke Advisors Inks Lease at Irvine Co.’s Trophy Office on L.A.’s Westside

Office · Investments & Sales
New York City

SL Green Looking to Sell Two Manhattan Buildings for Combined $300M

Industrial · Finance
National

Deutsche Bank, Barclays Refi Industrial Portfolio With $700M CMBS Loan

Office · Finance
New York City

Savanna’s 141 Willoughby Street in Brooklyn Enters Foreclosure

Dino Papparelli of Deutsche Bank and the interior of a warehouse.
Industrial · Finance
National

Deutsche Bank, Barclays Refi Industrial Portfolio With $700M CMBS Loan

By Andrew Coen
Savanna's Chris Schlank and Nick Bienstock, and 141 Willoughby Street, Brooklyn.
Office · Finance
New York City

Savanna’s 141 Willoughby Street in Brooklyn Enters Foreclosure

By Mark Hallum
JLL's Michael Gigliotti and Bayshore Residences, Bay Shore, N.Y.
Residential · Finance
New York

Truist Provides $140M Refi for Long Island Apartments

By Andrew Coen
More

  • Industry
    • Residential
    • Office
    • Retail
    • Industrial
    • Hospitality
    • Healthcare
    • Life Sciences
    • Special Purpose
    • Infrastructure
    • Mixed-Use
  • Leases
    • Office Leases
    • Ground Lease
    • Sublease
    • Tenant Talk
  • Finance
    • Acquisition
    • Construction Financing
    • CMBS
    • Distress
    • Refinance
  • Investments
    • Development Site
    • Portfolio Sale
    • Sale-Leaseback
    • Value-Add
  • Development
    • Architecture
    • Construction
    • Conversion
    • Redevelopment
    • Sustainability
  • Capital Markets
    • Alternative Lending
    • Earnings
    • Economy
    • Foreign Investments
    • Private Credit
    • Private Equity
    • Public Markets
    • REITs
  • Technology
  • More
    • Features
    • Columnists
    • Research & Analysis
    • Legal
    • Players
    • Transportation
  • About
    • Membership
    • Advertise
    • Newsletters
    • Contact
    • Reprints

Read the latest edition of the Commercial Observer online!

July 28th 2020 Magazine Issue Cover
© 2025 Observer Media Terms Privacy Cookie Settings Do not sell my data Sitemap