Short Sellers Step Up Bets Against Office Owners on Bank Turmoil
- Short interest on office owners has jumped, CMBX declines
- Office landlords have much higher leverage than other REITs
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Money managers have stepped up their bearish bets against office landlords, wagering that the US regional banking crisis will slash the availability of credit to property owners that were already suffering from the pandemic and rising interest rates.
Hedge funds are using credit derivatives and equities to bet against the companies and their debt. Almost 40% of shares in the iShares US Real Estate ETF are sold short, the highest proportion since June, according to data from analytics firm S3 Partners.