Analysts at Fitch Ratings suspect the next big round of bad news for banks will come from commercial real estate loans. "Virtually all major property types [multifamily, office, retail and industrial] are suffering from rising vacancies and declining rents," a recent Fitch report warned. The ratings agency is performing its own analysis of U.S. banks' exposure to debt secured by commercial property.
The commercial real estate sector is not expected to get help in the form of a big government rescue package. "Housing probably gets more attention because it's a big part of household wealth and, at its peak, it was a much bigger portion of the economy than [commercial] real estate," says Abiel Reinhart, an economist at JPMorgan Chase.
Tesco said it would suspend the expansion of its Fresh & Easy stores in the U.S., specifically in Northern California, but the U.K. retail giant is continuing to invest in the division's growth. The retailer has 125 of its discount stores in Phoenix, Las Vegas and Southern California and was planning to enter Northern California. Then, the economic downturn hit, prompting the retailer to alter its plans. However, Tesco has since added nearly 50 locations in Northern California and Nevada.