Jamie Dimon says the US can avoid a commercial real estate crisis if the economy sticks a soft landing

Jamie Dimon said the distress in the US commercial property sector won’t become a full-blown crisis, and will only deteriorate if the US hits a recession.

The CEO of JPMorgan Chase told CNBC on Monday that many real estate owners can manage the current level of stress weighing on the market, and rising defaults are “a normalization process” as long as the US can steer clear of a recession.

“If we don’t have a recession, I think most people will be able to muddle through this, refinance, put more equity in,” Dimon said during the bank’s high yield and leveraged finance conference in Miami. “If rates go up and we have a recession, there will be real estate problems, and some banks will have a much bigger real estate problem than others.”

When it comes to the falling property valuations, the CEO said it’s “not a crisis, that’s kind of a known thing,” while referring to the cratering office market. The sector is facing $150 billion of mortgages maturing by the end of this year and another $300 billion by 2026.

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