Is there a way to short CRE other than investing in non-commercial RE? I'd think you can probably directly short CRE-focused REITs but I'd be worried about them rebalancing or diversifying even as CRE starts to pop.
Does that help if you believe CRE is on the outs? CRE typically carries a much higher property tax burden, which means that if CRE starts to meaningly go by the wayside: That burden will shift to other property classes, making them much less attractive and/or cuts to services will be made, making the municipality much less attractive overall.
Probably fine if they own their buildings? I can't imagine how they would adapt that quickly, but if it still concerned you you could hedge with brownfield developers or even REITs that don't own (whose costs would presumably plummet)? Not at all an expert.
If you can find intelligence about which CRE will crater to zero and which will just be half of what it's now, you can arrange some in-kind swaps. But the ethics of this feels wrong.
Does that help if you believe CRE is on the outs? CRE typically carries a much higher property tax burden, which means that if CRE starts to meaningly go by the wayside: That burden will shift to other property classes, making them much less attractive and/or cuts to services will be made, making the municipality much less attractive overall.