Summary

Six major bankruptcies have led to a significant $9 billion debt collapse, signaling financial instability across key industries.

Highlights

Six major companies have filed for bankruptcy, triggering a chain reaction in the financial market.

The total debt collapse from these bankruptcies has reached an estimated $9 billion.

This development has raised concerns among investors and economists about potential broader economic fallout.

The affected companies span multiple sectors, suggesting a systemic or macroeconomic cause rather than isolated failures.

Analysts are closely monitoring the situation, warning of possible ripple effects on credit markets and employment.

at least six major retailers have filed for bankruptcy in the last 18 months putting $9 billion of CMDS loads at serious risk and if you’re a real estate investor those numbers should stop you in your tracks because of what’s happening today could very well spill over into the other types of real estate sectors let me ask you can you name just three of those retailers that have just filed for bankruptcy joanne 99 Cents Only Right Aid Party City Big Lots Bargain Hunters and the list goes on all of them gone bankrupt and more on the
edge this is not just about retail this is about the financial structure behind the deal itself and why this is a debt crisis and not just a store closure crisis this is about the financial structure behind the retail this is not just a retail issue it’s a debt crisis and this is not just about a store closure problem so let me break this down cms stands for commercial mortgage back security these are financial products made up of commercial real estate loans everything from shopping centers to office towers could all be
part of the CMBBS portfolio think of it like this wall Street slices up a bunch of commercial real estate loans and packages them all together then they ultimately sell them off to investors this is kind of like multifamily syndication except it has way more middlemen now here’s the issue just like in 2008 these loans are only valuable if the properties themselves are performing meaning they must have tenants paying real rent so when national tenants like Big Lots or Con for example defaults or exit their leases that cash flow
evaporates take Blue Owl Capital for example a large investment bank of over $275 billion in assets when Big Lots and Con both filed for bankruptcy and then they ultimately pulled out their occupancy tanked across their retail portfolio or the S&P or standard and pores downgraded them three notches that’s a brutal hit to their creditworthiness all as a result of the anchored tenants that file bankruptcy all of this makes its way down to Main Street in your portfolio and once a domino falls others follow because
confidence also starts to erode and if you’re holding a CNBS loan it’s not just a paper loss it’s a cash flow problem now let’s zoo out retail is just the first domino i’ve been in this business for over 30 years and every single cycle starts with one trigger in 2008 it was subprime residential today it’s underperforming commercial debt and retail is where the cracks are starting to show the truth is real estate is a team’s four when the lender the tenant and the landlord are all working together things can be magical but when
one party falters the entire deal can collapse right now landlords are left holding the bag with these big vacancies that they did not see coming and the next domino to fall would be the debt or the lenders behind those deals so what happens the lenders begin to start to tighten their credit boxes and retail tennis they’re evaporating as fast as Amazon is expanding this is exactly what happens when people invest in sentiment instead of just the numbers so let’s pull this into the broader economic context we’re in a sticky environment
right now inflation remains elevated interest rates are remaining high despite everyone wanting the continued cuts including the president customer spending is shifting less discretionary and more survival mode and the credit markets are starting to seize which is the point of this video we’re also heading into a wall of debt maturities throughout the remaining 2025 and of course into 2026 27 this includes office retail industrial multifamily all of it and as values remain down and cap rates remain up and interest rates remain up
these loan maturities are not going to stop and there’s no way out unless we see a dramatic decrease in interest rates most of these loans that are coming due were underwritten in 2019 2020 and 2021 and then they have a maturity date at the time they were low rate high occupancy lows and that is definitely not the world that we’re living in today and if you’re in multif family or industrial do not tune this out because some of these same lenders with the office buildings and the retail are also doing multif family and
industrial because if the CNBS loans start defaulting at a scale lenders are going to get very nervous and when lenders get nervous they pull back and they tighten their lending and when they tighten their lending every single asset class gets squeezed this is a credit contagion plain and simple let me give you the most important mindset shift that you’re definitely going to need in this upcoming environment cash flow is king it always has been and it always will be i’ve been preaching this forever this is a time where capital gain
strategy investors are going to get annihilated in my world we do not buy on appreciation we buy on performance i want real tenants paying real rent each and every month because that’s what pays your mortgage all the expenses and ultimately your investors which is exactly the whole point and ultimately if all that works then you can build your wealth on this model this all is in jeopardy if you don’t have the income and you don’t have the tent so ask yourself is the deal underwritten to today’s rents or yesterday’s hype have
you accurately modeled your vacancy and your rent increases in today’s current environment what happens if you lose an anchor tenant from the very real estate that was supposed to pay you passive income i’ve said this before and I’ll say it again buying the fundamentals not in the brochure because in a market like this thin deals break every single investor that overleveraged in a retail strip center or countered on inflated rent growth is on thin ice right now and are definitely in panic mode do not be that investor so here’s what I want you
to take away today this is not just a retail crisis it’s a warning shot to the entire credit system that is backed by commercial real estate so here’s your game plan moving forward focus on properties with strong tenant profiles and durable cash flow in the foreseeable future don’t just chase returns stress test everything and stay very close to your lender relationship if you’re new to the game or just trying to find your footing now’s the time to get educated now’s the time to go to community events like Limitless Expo which is precisely
why we created the event this year I can assure you there are going to be deals to be had and there’ll be people there that are dealing with the same problems that you are currently right now remember every single cycle also creates an opportunity for those that are educated and prepared for example in 2012 I had the opportunity to buy as many houses I wanted in Detroit for only $1 sounds crazy right but after flying out there with Robert Kiosaki to see it myself I completely walked away from the deal and it turned out to be one of the
smartest real estate decisions I ever made if you want to find out why just watch this video next gold is near all-time highs but appreciation isn’t the only way to benefit monetary Metals you could potentially earn a yield on your gold paid in physical gold without selling it here’s how it works when you lease your gold through their platform pre-qualified companies pay to use it under strict guidelines like renting out real estate but with gold instead of paying to store your metal you may earn up to 4% annually in gold you stay in