Real Estate Billionaire Barrack Says Commercial Mortgages on Brink of Collapse
- Predicts cascade of margin calls, foreclosures, bank failures
- Market needs a “time out” for 60 or 90 days to ease stresses
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Real estate investor Tom Barrack said the U.S. commercial-mortgage market is on the brink of collapse and predicted a “domino effect” of catastrophic economic consequences if banks and government don’t take prompt action to keep borrowers from defaulting.
Barrack, chairman and chief executive officer of Colony Capital Inc., warned in a white paper and in a subsequent interview on Bloomberg Television of a chain reaction of margin calls, mass foreclosures, evictions and, potentially, bank failures due to the coronavirus pandemic and consequent shutdown of much of the U.S. economy.