Carson Block, the founder of the famed short-selling investment firm Muddy Waters, revealed he’s betting against Blackstone Mortgage Trust on Wednesday, in a sign that he expects commercial real estate’s woes to drag on into next year. In a report titled “Here Comes the Cliff!,” Block suggested that the publicly traded real estate investment trust (REIT), which provides loans for the ailing commercial real estate sector, faces a “perfect macro storm” of rising interest rates and office vacancies.
Despite many CEOs’ pleas and threats for their employees to return to the office, office vacancies hit a record high of 13.3% in August, according to the National Association of Realtors. And overdue commercial real estate loans also hit a 10-year high last month as property values in the sector continue to sink amid higher interest rates.
