Office Owners Quit Paying In; Blackstone Lender Loses $327 Million

The 5-year Treasury yield, October 2025 to October 2026. The latest reading is 4.78 per cent, on Oct. 29, 2026.

Chart by the Intelligencer from figures by the Federal Reserve Board, via FRED

The 5-year Treasury yield, the base for many fixed-rate commercial loans, closed on Friday at 4.71 per cent, down from 4.85 on Wednesday and from 5.01 on Oct. 1, according to the Treasury Department. The 10-year fell to 4.94 per cent from 5.05. On a $5 million five-year loan priced off the 5-year yield, the two days' fall comes to about $7,000 a year of interest. Saxo Bank said Treasuries rallied all along the curve on Thursday as results from two large technology companies unsettled investors.

Thursday's figures pointed the other way. The Commerce Department reported that the economy grew at a 3.4 per cent annual rate in the third quarter, up from 2.2 per cent in the second, and prices measured by the PCE index, the Fed's preferred gauge, rose 3.6 per cent in the year to September. Futures traders put the chance of a Fed increase in December at about 83 per cent.

The S&P 500 fell 1.8 per cent on Friday to about 7,580, the Nasdaq fell nearly 2.9 per cent to finish its worst month since March 2025, and the Dow fell 1.1 per cent.

Micah Mallace, chief executive of the State Ports Authority, delivers his State of the Port address in Charleston.

Courtesy of SC Ports

CHARLESTON, Oct. 27. Charleston's port lost cargo because its rates had climbed above those of competing ports, the State Ports Authority's chief executive, Micah Mallace, said on Tuesday in his State of the Port address. Containers through the authority's terminals fell 4.6 per cent in fiscal 2026, in a year he said was flat for the industry.

Mr. Mallace said the authority had cut its expenses by 20 per cent in a year and passed the savings to customers, bringing its rates back in line. Customers have committed about 159,000 containers of new business, roughly 6 per cent of a year's traffic, arriving through 2027. He also pointed to the port's mix: half of Charleston's cargo is consumer goods, against 67 per cent across the South Atlantic and 81 per cent nationally.

GREENVILLE, S.C., Oct. 30. Warehouse rents in Greenville and Spartanburg are back at their record even with 8.5 per cent of the space empty, and almost nobody is building more. Asking rent averaged $6.03 a square foot a year in the third quarter, matching the high of late 2023 and up 2 per cent in a year, while less than 1.7 million square feet is under construction, 8.4 per cent of the pipeline at the end of 2022, according to Cushman & Wakefield.

Tenants keep taking space. The market has added occupied space for eight quarters running, about 646,000 square feet in the third quarter and more than 2.6 million this year, and vacancy in space offered directly by landlords has fallen to 7.1 per cent, more than three points below its peak at the end of 2024. Along the Greer and Highway 101 corridor, rents rose 3.6 per cent in a single quarter to $6.40, so a 100,000-square-foot building there now asks $640,000 a year.

Cushman & Wakefield said limited big-box availability made the third quarter the first this year without a lease of more than 500,000 square feet, and the average new lease shrank to about 41,000 square feet, from more than 87,000 in the first half. Developers broke ground on three speculative buildings totaling about 548,000 square feet.

SANTA CLARA, Calif., Oct. 30. Intel's shares plunged on Friday after the chip maker's forecast for the final quarter of the year fell short, which it blamed on slow sales of personal computers.

On Thursday the head of a large real estate lender told investors that the owners of some office buildings it lends against won't put any more of their own money in. In plain English, some of those buildings may go back to the lender.

The usual view is that walking away from a loan is a kind of theft, and it has a verse. "The wicked borroweth, and payeth not again: but the righteous sheweth mercy, and giveth." Psalm 37:21. The case is strong. When an owner walks, somebody else eats the loss, often a pension fund holding the bonds, and every default makes the next lender charge the honest borrower a little more.

I'd take that seriously if the owners walked away whole. They don't.

In 2006 Tishman Speyer and BlackRock bought Stuyvesant Town and Peter Cooper Village, 11,200 apartments in Manhattan, for $5.4 billion. In January 2010 they announced they would turn the property over to their lenders. The $1.89 billion of equity was gone, completely, and among those who lost it were two California pension funds and the Church of England. The lenders stood behind them and got a building. The owners got nothing.

That's the order a loan against a building is supposed to run. The owner loses first and can lose all of it. The lender agreed to look to the building as its security and charged interest for that risk, and the extra it charges is the price of exactly this day. When the contract says the building is the security and the man is not, handing over the building is the payment the contract named.

There is a different man, and I won't defend him: the one who can pay, chooses not to, and hides money the contract says he owes. The Psalm fits him.

The country tried the other road early. Robert Morris signed the Declaration of Independence and found the money to fight the Revolution. When his land speculations collapsed, he was sent to the debtors' prison on Prune Street in Philadelphia in 1798, and he stayed until 1801, when he was let out under the new Bankruptcy Act of 1800. The Republic decided that a debt should end somewhere.

The verse is about a man who takes and means never to give back. An owner who put up his own money, kept a loan alive through three hard years, and then hands over the building on the terms both sides signed isn't that man, and if he came to my bank with a new building at a fair price, I'd hear him out.

Dear Editor: I bought a box of nails on Tuesday and was asked for my electric mail address so that the receipt might be sent to me. I replied that the receipt might be handed to me, as I was standing there. The clerk said the machine did not offer that. I have the nails, and the machine has my opinion. Paper is not yet extinct, and neither am I.

A Man of Record, Pendleton Street

Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law. Romans 13:8.