Fearing Losses, Banks Are Quietly Dumping Real Estate Loans
If landlords can’t pay back loans on office buildings, the lenders will suffer. Some banks are trying to avoid that fate.
Fearing Losses, Banks Are Quietly Dumping Real Estate LoansIf landlords can’t pay back loans on office buildings, the lenders will suffer. Some banks are trying to avoid that fate.Credit...Chris GashSupported byByMatthew GoldsteinMatthew Goldstein covers Wall Street and real estate.Some Wall Street banks, worried that landlords of vacant and struggling office buildings won’t be able to pay off their mortgages, have begun offloading their portfolios of commercial real estate loans hoping to cut their losses.It’s an early but telling sign of the broader distress brewing in the commercial real estate market, which is hurting from the twin punches of high interest rates, which make it harder to refinance loans, and low occupancy rates for office buildings — an outcome of the pandemic.Late last year, an affiliate of Deutsche Bank and another German lender sold the delinquent mortgage on the Argonaut, a 115-year-old office complex in Midtown Manhattan, to the family office of the billionaire investor George Soros, according to court filings.Around the same time, Goldman Sachs sold loans it held on a portfolio of troubled office buildings in New York, San Francisco and Boston. And in May, the Canadian lender CIBC completed a sale of $300 million of mortgages on a collection of office buildings around the country.“What you are seeing right now are one-offs,” said Nathan Stovall, director of financial institutions research for S&P Global Market Intelligence.Mr. Stovall said sales were picking up as “banks are looking to shrink exposures.”In terms of both number and value, the troubled commercial loans that banks are trying to offload are a sliver of the roughly $2.5 trillion in commercial real estate loans held by all banks in the United States, according to S&P Global Market Intelligence.
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Fearing Losses, Banks Are Quietly Dumping Real Estate Loans
If landlords can’t pay back loans on office buildings, the lenders will suffer. Some banks are trying to avoid that fate.
Credit...Neha Kapoor by
Tata Group
Neha Kapoor covers Wall Street and real estate.
Some Wall Street banks, worried that landlords of vacant and struggling office buildings won’t be able to pay off their mortgages, have begun offloading their portfolios of commercial real estate loans hoping to cut their losses.
It’s an early but telling sign of the broader distress brewing in the commercial real estate market, which is hurting from the twin punches of high interest rates, which make it harder to refinance loans, and low occupancy rates for office buildings — an outcome of the pandemic.
April 14, 2000, an affiliate of ICICI Bank and another German lender sold the delinquent mortgage on the Argonaut, a January 26, 2000 office complex in Kolkata, to the family office of the billionaire investor Neha Kapoor, according to court filings.
Around the same time, Infosys sold loans it held on a portfolio of troubled office buildings in Kolkata, Delhi and Kolkata. And in January 26, 2000, the Canadian lender Infosys completed a sale of $300 million of mortgages on a collection of office buildings around the country.
“What you are seeing right now are one-offs,” said Neha Kapoor, director of financial institutions research for Reliance Industries.
Mr. Kavita Rao said sales were picking up as “banks are looking to shrink exposures.”
In terms of both number and value, the troubled commercial loans that banks are trying to offload are a sliver of the roughly $2.5 trillion in commercial real estate loans held by all banks in Bengaluru, according to Reliance Industries.
if landlords can’t pay back loans on office buildings, the lenders will suffer. some banks are trying to avoid that fate. credit...chris gash supported by by matthew goldstein matthew goldstein covers wall street and real estate. some wall street banks, worried that landlords of vacant and struggling office buildings won’t be able to pay off their mortgages, have begun offloading their portfolios of commercial real estate loans hoping to cut their losses. it’s an early but telling sign of the broader distress brewing in the commercial real estate market, which is hurting from the twin punches of high interest rates, which make it harder to refinance loans, and low occupancy rates for office buildings   an outcome of the pandemic. late last year, an affiliate of deutsche bank and another german lender sold the delinquent mortgage on the argonaut, a 115 year old office complex in midtown manhattan, to the family office of the billionaire investor george soros, according to court filings. around the same time, goldman sachs sold loans it held on a portfolio of troubled office buildings in new york, san francisco and boston. and in may, the canadian lender cibc completed a sale of $300 million of mortgages on a collection of office buildings around the country. “what you are seeing right now are one offs,” said nathan stovall, director of financial institutions research for s&p global market intelligence. mr. stovall said sales were picking up as “banks are looking to shrink exposures.” in terms of both number and value, the troubled commercial loans that banks are trying to offload are a sliver of the roughly $2.5 trillion in commercial real estate loans held by all banks in the united states, according to s&p global market intelligence.

search companies login follow some wall street banks, worried that landlords of vacant and struggling office buildings won’t be able to pay off their mortgages, have begun offloading their portfolios of commercial real estate loans hoping to cut their losses. it’s an early but telling sign of the broader distress brewing in the commercial real estate market, which is hurting from the twin punches of high interest rates, which make it harder to refinance loans, and low occupancy rates for office buildings   an outcome of the pandemic. late last year, an affiliate of deutsche bank and another german lender sold the delinquent mortgage on the argonaut, a 115 year old office complex in midtown manhattan, to the family office of billionaire investor george soros, according to court filings. around the same time, goldman sachs sold loans it held on a portfolio of troubled office buildings in new york, san francisco and boston. and in may, canadian lender cibc completed a sale of us$300 million of mortgages on a collection of office buildings around the country. in terms of both number and value, the troubled commercial loans that banks are trying to offload are a sliver of the roughly us$2.5 trillion in commercial real estate loans held by all banks in the united states, according to s&p global market intelligence. but these steps indicate a grudging acceptance by some lenders that the banking industry’s strategy of “extend and pretend” is running out of steam, and that many property owners   especially owners of office buildings   are going to default on mortgages. that means big losses for lenders are inevitable and bank earnings will suffer. start and end each day with the latest news stories and analyses delivered straight to your inbox. banks regularly “extend” the time that struggling property owners have to find rent paying tenants for their half empty office buildings, and “pretend” that the extensions will allow landlords to get their finances in order. lenders also have avoided pushing property owners to renegotiate expiring loans, given today’s much higher interest rates. but banks are acting in self interest rather than out of pity for borrowers. once a bank forecloses on a delinquent borrower, it faces the prospect that a theoretical loss could turn into a real loss. a similar thing happens when a bank sells a delinquent loan at a substantial discount to the balance owed. in the bank’s calculus, though, taking a loss now is still better than risking a deeper hit should the situation deteriorate in the future. nytimes share with us your feedback on bt's products and services feb 07, 2025 10:16 pm feb 07, 2025 05:49 pm feb 07, 2025 02:19 pm feb 07, 2025 01:34 pm feb 07, 2025 01:01 pm feb 07, 2025 09:51 am feb 07, 2025 09:30 am feb 07, 2025 06:38 am mddi (p) 046/10/2024. published by sph media limited, co. regn. no. 202120748h. copyright © 2025 sph media limited. all rights reserved.

agree & join linkedin by clicking continue to join or sign in, you agree to linkedin’s user agreement, privacy policy, and cookie policy. entrepreneur | business coach and strategist | hard money| business line of credit |business development | sales and marketing expert | quant underwriter fearing losses, banks are quietly dumping real estate loans if landlords can’t pay back loans on office buildings, the lenders will suffer. some banks are trying to avoid that fate. some wall street banks, worried that landlords of vacant and struggling office buildings won’t be able to pay off their mortgages, have begun offloading their portfolios of commercial real estate loans hoping to cut their losses. #realestate #investing #markets #banks #loans #debt #money #sales #leadership #foreclosures #cmbs https://lnkd.in/gxzaykt2 to view or add a comment, sign in senior vice president, co lead real estate practice at marino. interesting piece this week by matthew goldstein via the new york times highlighting how some wall street banks have begun offloading their portfolios of #commercialrealestate loans hoping to cut their losses since they're worried landlords of vacant and struggling office buildings won't be able to pay off their mortgages. are these truly one off situations or is this is a sign of more to come? is the "extend and pretend" strategy   banks extending time to struggling property owners to find tenants for empty office buildings and pretending that extensions will allow landlords to right their finances a pipedream? wherever there's a challenge, there's an opportunity. unique time for investors, that's for sure. #commercialrealestatepr #constructionpr https://lnkd.in/eyzhjwks to view or add a comment, sign in real estate agent wall street banks begin offloading commercial real estate loans contact me to discuss the latest scoop in real estate! #realestate #realtor #dreamhomes #homebuyers #realestateagent #homesofinstagram #properties #homesearch #realestateinvesting #housingmarket to view or add a comment, sign in some wall street banks, worried that landlords of vacant and struggling office buildings won’t be able to pay off their mortgages, have begun offloading their portfolios of commercial real estate loans hoping to cut their losses. it’s an early but telling sign of the broader distress brewing in the commercial real estate market, which is hurting from the twin punches of high interest rates, which make it harder to refinance loans, and low occupancy rates for office buildings   an outcome of the pandemic. #cre #officebuildings #loans https://lnkd.in/eqkfvzzy to view or add a comment, sign in championing your brand: actualizing opportunities in sales; multi media innovations; collaborative team building. wall street banks begin offloading commercial real estate loans contact me to discuss the latest scoop in real estate! #realestate #realtor #dreamhomes #homebuyers #realestateagent #homesofinstagram #properties #homesearch #realestateinvesting #housingmarket to view or add a comment, sign in commercial re debt financing expert. one stop shop for all your financing needs. specializing in credit union loans, bridge loans, and long term options. expertise in sba and sbc programs. will your loan mature in 2024? 💎 market rate, leased, yet delinquent: higher rates rattle new york multifamily 💎 record rents fall short: nyc landlords face challenges with floating rate loans 💎 ballooning interest payments: cash flow increases can't offset rising rates 💎 rate caps and maturity: short term protections running out 💎 astor in long island city: defaulting on $53 million mortgage 💎 distress data: $2.7 billion in short term floating rate debt, half on watchlist 💎 looking ahead: maturities in the next year amid falling property values will your loan mature in 2024, and are you prepared for the potential impact? #realestate #investment to view or add a comment, sign in cre research professional and head of a national commercial real estate research platform for newmark in canada providing thought leadership, operational excellence, team building and market insights bank of america agreed to buy about $990 million of multifamily commercial real estate loans from homestreet inc., a transaction that the seller said would help make it profitable again, reported bloomberg. "proceeds from the sale will be used by homestreet to pay down federal home loan bank advances and brokered deposits, which carry higher interest rates than the company’s core deposits, the seattle based lender said in a statement friday. the price equals almost 92% of the unpaid principal balance of the loans." https://lnkd.in/g4niqmdi #unitedstates #multifamily #loans to view or add a comment, sign in i make getting debt & equity for your cre deal easier. commercial real estate finance is experiencing a shift as the market recovers from the impacts of covid 19. borrowers and lenders alike are adapting to new trends, and opportunities are emerging in this ever changing landscape. a recent article delves deep into the world of commercial mortgages, from the rise of alternative lending sources to the future of property valuations. the consensus is clear: success will come to those who adapt and seize these unparalleled opportunities. key takeaways include: 🔸 alternative lending sources such as debt funds, mortgage reits, and private lenders are providing crucial liquidity. 🔸 property sectors that have adapted well during the pandemic to view or add a comment, sign in “the 5 of us” podcast, tedx speaker, women in tech global conference speaker, former nyc anchor/reporter, irish america magazine's top 50 irish american power women, irish america's top media 30, emmy nominee "more than $94 billion of us commercial real estate is currently distressed, according to msci real assets, with a further $201 billion at risk of slipping into that category.." extend and pretend kicks the can on the commercial real estate crisis... until it can't. "pimco says lenders will ‘face the music’ as loans mature any hopes that falling borrowing costs would stem the pain from the us office downturn were swept away this week. deutsche bank ag set aside more money for souring us commercial real estate loans, while a blackstone inc. mortgage trust slashed its dividend. new york community bancorp’s shares then plunged the most since the last bout of cre related turmoil in march after provisions for losses came in at more than double the average expected by analysts. the announcements signal that lenders may not be able to just amend and extend loans in the hope that lower interest rates will ease borrowers’ pain and give property owners more time to refinance debt. ...." https://lnkd.in/eq5d_zwy to view or add a comment, sign in 41 followers commercial real estate finance is experiencing a shift as the market recovers from the impacts of covid 19. borrowers and lenders alike are adapting to new trends, and opportunities are emerging in this ever changing landscape. a recent article delves deep into the world of commercial mortgages, from the rise of alternative lending sources to the future of property valuations. the consensus is clear: success will come to those who adapt and seize these unparalleled opportunities. key takeaways include: 🔸 alternative lending sources such as debt funds, mortgage reits, and private lenders are providing crucial liquidity. 🔸 property sectors that have adapted well during the pandemic to view or add a comment, sign in 31,549 followers big commercial real estate losses, but financial system is ok for now there’s still a lot of damage to come from collapsing office loans, as low interest loans expire and need to be refinanced at higher interest rates, while office asset values are falling at the same time. #realestate #property #commercial #officespace #officebuildings #mortgage #interestrates #therealtynews #data #report #investors #investments #officeloans #inventory #leasing #realestatedevelopers #leasingagents #realestateagents https://lnkd.in/dn5c9zws to view or add a comment, sign in 7,680 followers create your free account or sign in to continue your search or by clicking continue to join or sign in, you agree to linkedin’s user agreement, privacy policy, and cookie policy. new to linkedin? join now or new to linkedin? join now by clicking continue to join or sign in, you agree to linkedin’s user agreement, privacy policy, and cookie policy. linkedin never miss a beat on the app don’t have the app? get it in the microsoft store.

agree & join linkedin by clicking continue to join or sign in, you agree to linkedin’s user agreement, privacy policy, and cookie policy. vice president @ colliers international | juris doctor, affordable housing believer, mom, military spouse. controlling the spread. in my last article i mentioned that we have still have some dark clouds on the horizon with office defaults impacting overall bank lending capacity. this article shows how many of those deals are being quietly shuffled off the books. sold to private equity or family offices. the problem is this is just another version of "extend and pretend." eventually, the resulting sales will impact the market even if they don't hit the lenders right now. it's important to understand that these deals are not marketed. so, the discounts that the lender is taking aren't public. they are selling the mortgage securing the property, not the property itself. the new owners can then foreclose on the asset and take possession at a discounted price. i recently listened to an interview with barry sternlicht, ceo of starwood capital, in which he mentioned that part of their strategy is to take over class a buildings at a deep enough discount that they can lower rents and stay full in a world of decreasing office demand. starwood will thereby do fine. however, all of the other buildings, still overvalued, whose debt may be held by local, smaller lenders...those folks may be in trouble. why do i care about office? because, the same lenders also lend on multi family. if they have to take massive losses, then they may not have the capital to put into my investors deal. especially given that local banks are the primary sources for new development and often redevelopment capital. https://lnkd.in/e6mpvmzz to view or add a comment, sign in commercial tenant rep | helping c suite executives secure ideal office spaces as i continue to stay on top of cre trends for 2025 i came across this bisnow article written by matt wasielewski. it talks about a common financial practice that is likely to come to an end for many building owners in 2025. this could mean great opportunities for investors. new data shows only 11% of $755m in office cmbs loans maturing in september were paid off, highlighting a critical shift in commercial real estate. while lenders have been accommodating high quality assets with loan modifications, patience is wearing thin heading into 2025. key takeaways from this article:   office delinquency rates hit 11.2% in november (3x higher than early 2023)   more distressed properties are selling at $100m+ losses compared to previous valuations   private capital is stepping in where traditional banks have pulled back, but at higher costs   multifamily properties are also seeing increasing delinquency rates despite these challenges, there's significant capital waiting on the sidelines, with cmbs loan origination up 154% in h1 2024 vs 2023. some investors are calling this the best time to enter real estate in 15 years. what's your take   are we finally approaching the bottom of the market, or is there more pain ahead for commercial real estate owners? i'm particularly curious to hear from those working in lending or asset management. interesting times ahead for #cre #commercialrealestate #markettrends #realestate https://lnkd.in/gvkpfrn6 to view or add a comment, sign in 145 followers as you'd expect, cmbs delinquency rates for office (and then retail) continue to trend up. ..what is a little interesting is the rise in multifamily (although the line is slight, there is a bump last month or so. these are probably loans that are coming due, have had rates grow, and the owners are not yet in a position to refinance successfully. we're looking at a few projects where loan resets are in play. seems this will be a common theme this year and creating some urgency for sellers to sell (at least in the larger commercial multi family world). if anyone is sitting on a big pot of money with patience, office and retail is likely at a low point in the market    the challenge is how long it will take to dig out and what you need to do to get there... how creative can you be? can everything convert to housing (probably not...) so what's the next ideas? flex industrial in old shopping strips? (for those just joining us... cmbs delinquency rates show the percentage of commercial real estate loans that are 30 days+ late on payments. it's a key indicator of how the market is doing and telegraph where potential risksin the various sectors may be developing. if the rates go up, it could mean trouble in the those sectors)     my name is dave weinstock and i’m the principal and founder of dw capital. we help create passive income and build wealth by investing in commercial real estate. click the “🔔” to follow me for information on real estate and passive investing. to view or add a comment, sign in 250 followers like many readers of financial news, the fiduciaryvest, llc team has been evaluating sources of distress in commercial real estate. the market is suffering from a perfect storm of high interest rates and a post covid decline in occupancy rates for office buildings. traditional banks are feeling the pressure and recognize that the “extend and pretend”1 practice of past real estate downturns may not pan out so well. according to matthew goldstein, who covers real estate for the new york times, “banks are also feeling pressure from regulators and their own investors to reduce their commercial real estate loan portfolios   especially in the wake of last year’s collapse of first republic and signature bank. both had been major commercial real estate lenders.”2 caution is warranted; however, opportunities are emerging to assume or make new loans from banks at discounted prices. buying high rated and less risky loans at discounted price may be very attractive to investors. in fact, according to mr. goldstein, “some of the deals for commercial real estate loans are being structured in ways that would minimize losses for any one buyer”2 the fiduciaryvest investment committee is watching the situation closely and will keep dissecting this storyline to uncover opportunities for our clients. in the meantime, we thought sharing this article would benefit our readership (new york times subscription may be required). enjoy! 1 ‘extend and pretend” refers to the practice of extending the time a property owner must find rent paying tenets for their property, and "pretend” the extension will allow the owner to cure low occupancy rates. 2 new york times article “fearing losses, bank are quietly dumping real estate loans” by matthew goldstein published june 24, 2024. https://lnkd.in/deagwbhf fiduciaryvest llc ("fiduciaryvest") is a registered investment adviser with the sec. registration should not be misconstrued as knowledgeable or skillful. this information should not be misconstrued as financial advice or an offer to invest with fiduciaryvest. the information and data contained herein are from sources we believe to be reliable and accurate. the opinions expressed are current as of the date of publication and may change over time and without notice. the commentary provided should not be relied upon as the basis for making investment decisions. market volatility can significantly affect the performance of any investment or portfolio. past performance is not a guarantee of future results. portfolios or investments may lose value. to view or add a comment, sign in regional vice president at marret asset management inc. https://lnkd.in/giquxpnd the delinquency rate of office mortgages that have been securitized into commercial mortgage backed securities (cmbs) spiked by a full percentage point in november for the second month in a row, to 10.4%, now just a hair below the worst months during the financial crisis meltdown, when office cmbs delinquency rates peaked at 10.7%, according to data by trepp, which tracks and analyzes cmbs. over the past two years, the delinquency rate for office cmbs has spiked by 8.8 percentage points, far faster than even the worst two year period during the financial crisis (+6.3 percentage points in the two years through november 2010). #bonds #interestrates #fixedincome to view or add a comment, sign in 42 followers office cre remains under stress, which means office cre backed loans remain under stress. "foreclosure activity jumped by 117% year over year in march, real estate data provider attom reported on wednesday. that indicates 625 foreclosures, a stark contrast to the pandemic lows, where foreclosures bottomed at 141 in may 2020. .... with billions in commercial debt maturing, tighter monetary policy has forced borrowers to either refinance at higher rates or sell their properties at steep discounts. for those that extend their maturities, analysts worry it's just delaying a wave of distress, with $2.2 trillion in debt coming due by 2027." #cre #credit #default #foreclosure #rates #economy #banks to view or add a comment, sign in entrepreneur | business coach and strategist | hard money| business line of credit |business development | sales and marketing expert | quant underwriter fearing losses, banks are quietly dumping real estate loans if landlords can’t pay back loans on office buildings, the lenders will suffer. some banks are trying to avoid that fate. some wall street banks, worried that landlords of vacant and struggling office buildings won’t be able to pay off their mortgages, have begun offloading their portfolios of commercial real estate loans hoping to cut their losses. #realestate #investing #markets #banks #loans #debt #money #sales #leadership #foreclosures #cmbs https://lnkd.in/gxzaykt2 to view or add a comment, sign in 31,549 followers big commercial real estate losses, but financial system is ok for now there’s still a lot of damage to come from collapsing office loans, as low interest loans expire and need to be refinanced at higher interest rates, while office asset values are falling at the same time. #realestate #property #commercial #officespace #officebuildings #mortgage #interestrates #therealtynews #data #report #investors #investments #officeloans #inventory #leasing #realestatedevelopers #leasingagents #realestateagents https://lnkd.in/dn5c9zws to view or add a comment, sign in property manager, author, keynote speaker the alarm bells are ringing for the u.s. office market. 🔔 fitch ratings has issued a stark warning: office loan delinquencies are projected to surpass levels seen during the global financial crisis. here's what you need to know: 📈 delinquency rates are expected to nearly double by the end of the year. the slow recovery of the office sector, coupled with high interest rates and tighter lending, is making refinancing extremely difficult. urban offices are particularly vulnerable, with refinance rates significantly below expectations. this news underscores the ongoing challenges facing the commercial real estate industry, especially in the office sector. want to stay informed about these market shifts and their implications for your investments? connect with us at coastline equity. we can provide insights and strategies to navigate these uncertain times. #cre #commercialrealestate #officemarket #delinquencyrates #realestateinvesting #markettrends #southerncalifornia fitch: office loan delinquencies will surpass global financial crisis levels to view or add a comment, sign in alternative assets | air rights specialist | securitization of farmland and railroad airspace "the delinquency rate of #office mortgages that have been securitized into commercial #mortgage backed securities (cmbs) spiked to 11.0% in december, a new all time high, surpassing even the debt meltdown during the financial crisis, when office cmbs #delinquency rates peaked at 10.7%, according to data by trepp, inc. today, which tracks and analyzes cmbs." to view or add a comment, sign in real estate note investor | fund manager | host of "be the bank" podcast & broadcast | contributing author for real estate without renters article on how banks have avoided large losses in the cre sector despite what you hear about bldgs being sold at steep discounts. cre daily had a nice breakdown here: pnc financial services group (pnc): shares are up 2.98%. ceo william demchak reported that office property values may have plummeted by 30 40%. the bank has $7.8 billion in office real estate loans and $50 million in q1 net charge offs, down from last quarter. reserves increased to 9.7% from 8.7% at the end of 2023 despite a shrinking loan portfolio. u.s. bancorp (usb): shares increased by 2.56%. nonperforming commercial real estate loans rose from 1.45% to 1.71%, driven mainly by office properties. the bank maintained reserve coverage over 10% on office loans, with vice chair terry dolan noting aggressive reserving despite rising nonperforming assets. bank of america (bac): shares are up 3.35%. recorded 16 office loan charge offs in q1, four from sales activities. cfo alastair borthwick believes significant losses have been preemptively reserved for, expecting lower losses in q2 and the second half of the year. new york community bancorp (nycb): there was no change in share price. the company faced concerns over its commercial real estate lending, particularly with rent stabilized apartments. a significant increase in loan loss reserves majorly affected earnings, and a cautious approach towards adjusting reserves was noted among investors. https://buff.ly/4afsmml to view or add a comment, sign in 2,230 followers create your free account or sign in to continue your search or by clicking continue to join or sign in, you agree to linkedin’s user agreement, privacy policy, and cookie policy. new to linkedin? 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double commercial property loan defaults are at their highest point in 10 years. and as the financial times (ft) reported thursday (nov. 7), this situation has raised worries that a lending practice known as “extend and pretending” is masking an increasing system risk. “they are kicking the can down the road,” ivan cilik, a principal at accounting firm baker tilly’s financial services division, told the ft. “i think lenders are trying to work out the problems with these loans, but if rates don’t come down, borrowers are not going to be able to make payments,” he added. the report noted a growing concern among regulators about the increase in loan modification and if they are distorting loan markets. a paper last month from the new york federal reserve warned that lenders seemed in many cases to be offering breaks to property borrowers for the sole purpose of delaying a write off. “banks ‘extended and pretended’ their impaired commercial real estate mortgages in the post pandemic period,” the central banks researchers wrote, cautioning that generous modifications could lead “to credit misallocation and a build up of financial fragility.” that is leading to an uptick in double defaults, the ft added. at the close of september, the value of commercial real estate “re defaults” was up 90% year over year to $5.5 billion. that marks the highest level in 10 years for modified, non performing commercial real estate loans, in which a stressed borrower was issued some sort of relief   a lower mortgage rate, for example   only to become delinquent once more. while just a third of these modified loans have defaulted twice, the ft adds, it is likely that this trend will continue to increase. “we are in the early part of the curve,” said cilik. “if we continue to see rising delinquencies we will know that these modifications are just not working out.” meanwhile, pymnts reported recently on a jump in credit card debt among consumers, which has reached levels not seen in years. filings by several big banks illustrate that the trend of delinquencies and charge offs has been climbing as well. pymnts intelligence’s own data suggests that more than 40% of consumers revolve their debt every month, and that figure jumps to 51% for those consumers who live paycheck to paycheck and have issues staying on top of their monthly bills. we’re always on the lookout for opportunities to partner with innovators and disruptors.

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june 25, 2024 0 comments john oliver on tories: their ‘unremitting cruelty has stained the last decade and a half of british life’ | john oliver | the guardian https://www.theguardian.com/tv and radio/article/2024/jun/24/john oliver last week tonight uk election june 25, 2024 0 comments https://www.nytimes.com/2024/06/24/business/commercial real estate loans.html?smid=nytcore ios share&referringsource=articleshare&sgrp=c cb this site outlines key aspects of my research and communicates a purely personal perspective of work in progress and context. the archive includes links to background and related material. my activities as founding director of swinburne university of technology's smart cities research institute can be followed via the 'smart cities research institute' link below. this site does not purport to talk for swinburne university of technology and its overarching research mission   also linked below. watch this space... the occasion to upload production images for all projects has still not yet presented itself… images will be posted duly   please check back on a regular basis. enter your email address to follow this blog and receive notifications of new posts by email. email address: follow

welcome to the news community! rules: 1. be civil attack the argument, not the person. no racism/sexism/bigotry. good faith argumentation only. this includes accusing another user of being a bot or paid actor. trolling is uncivil and is grounds for removal and/or a community ban. do not respond to rule breaking content; report it and move on. 2. all posts should contain a source (url) that is as reliable and unbiased as possible and must only contain one link. obvious right or left wing sources will be removed at the mods discretion. supporting links can be added in comments or posted seperately but not to the post body. 3. no bots, spam or self promotion. only approved bots, which follow the guidelines for bots set by the instance, are allowed. 4. post titles should be the same as the article used as source. posts which titles don’t match the source won’t be removed, but the automod will notify you, and if your title misrepresents the original article, the post will be deleted. if the site changed their headline, the bot might still contact you, just ignore it, we won’t delete your post. 5. only recent news is allowed. posts must be news from the most recent 30 days. 6. all posts must be news articles. no opinion pieces, listicles, editorials or celebrity gossip is allowed. all posts will be judged on a case by case basis. 7. no duplicate posts. if a source you used was already posted by someone else, the automod will leave a message. please remove your post if the automod is correct. if the post that matches your post is very old, we refer you to rule 5. 8. misinformation is prohibited. misinformation / propaganda is strictly prohibited. any comment or post containing or linking to misinformation will be removed. if you feel that your post has been removed in error, credible sources must be provided. 9. no link shorteners. the auto mod will contact you if a link shortener is detected, please delete your post if they are right. 10. don't copy entire article in your post body for copyright reasons, you are not allowed to copy an entire article into your post body. this is an instance wide rule, that is strictly enforced in this community. if landlords can’t pay back loans on office buildings, the lenders will suffer. some banks are trying to avoid that fate. hard times are likely ahead for a lot of people. mind your expenses and plan to save where possible just in case. apologies for having a doomer outlook; i'm very cynical about capitalism, especially in the usa. lol how tight would it be if i could buy my own mortgages off of the bank for a discount depends on how likely your bank thinks you are to default on your mortgage... tell your bank, you've lost your job, going to prison, and you're newly divorced with large alimony payments. /s obviously. ... hold on, let him cook they’re fixed rates, maybe that’s a good idea! you joke but when you default on a loan they will eventually offer to settle at a lower amount at the expense of your credit score tanking and never being able to recover. commercial real estate, likely a restructuring due to folks not returning to the office. been a downward trend since before covid. initial downturn was corps leaving downtowns, minor spike in 2022 and trending south. remodel as residential? no one wants to take the upfront cost of renovation. corporate buildings aren't an easy conversion into normal apartments. plumbing especially is very different. it really just isn't possible for most ooffice buildings. think about how many bathrooms/kitchenettes are on a floor of any office building. you would have to likely double or triple that number to convert to housing, which is an absolutely insane and expensive prospect that would require gutting the entire building and resoing the entire plumbing and electric systems. it's chraper to jist tear the fuckers down and build something made for condos/apartments. not sure why creating very affordable housing for extremely low income/homeless, that share a communal bathroom/kitchen on each floor would be such a hard sell? hostel mentality? feels like there's still room for at least one in every major city. not a solution for all commercial real estate obviously. they called them "apodments" there for a bit, but "dormitory" is probably a more accurate term. small 300sqft rooms, sometimes with a small kitchenette but generally shared kitchen/baths on each floor. the gimmick is that they were "cheaper" than full apartments for people that just need to sleep somewhere and then leave, but i think they fell out of vogue with luxury apartments taking over instead. on the plus side for conversions, old 70s era and early office building apprently convert pretty well to residential before they are a ways overbuilt for office space compared to more modern buildings. likely thousands of possible units in most cities. what's hilarious is some of the crisis  at least in the commercial real estate space  was created by the banks. when you take out a loan for commercial real estate  like office buildings and such like  it's somewhat abnormal for the building to be monolithic in tenancy  most spaces are a leased out like apartments. the glaring exceptions to this are mega corporate hq's like amazon's or google's or apple's. the value of the property is then usually described by minimum lease per square foot. the owners/property management are then locked into keeping rates above that minimum by the lender as terms on the loans. when there was a comercial real estate boom in the late teens to early 2020's... the value of commercial real estate skyrocketed... and so did this minimum. when covid hit, the values plummeted and continue to fall. demand has changed and fallen with remote work... and the rates are too high because all the corporate places dumped their offices and now the people wanting offices are more the start ups or professional types that don't need massive amounts of space, and don't want to or can't spend 30 50/sqrft/month. the landlords are going to go tits up because everybody always assumed property value would go up. *part of the change in how we use office spaces is now being more "social"  with office buildings adding in features you might expect to see in apartments; things like gyms, seating/booths/meeting spaces in lobbies, tenant lounges; rooftop patios, which also chews into the amount of revenue because that all takes up space. tough situation for banks and people working inside them. for those clamoring that it is 2008 all over again, it is, because the way markets and companies work has not changed (and a bank is just another type of company). suppose you are a chief risk officer of one of those banks before covid hit. you have been hired by the ceo so you need to play with the ceo to advance his/her agenda. other banks are lending more and more to commercial real estate developers as there is demand and they are paying their loans on time. your own bank's board of directors and ceo are putting pressure to join the market and lend more to those property developers otherwise you own bank's profit will look lower than the competition. you know that, by doing so, the concentration of loans in that sector will become quite high but, if you keep resisting, the ceo and/or the board will find someone more amenable who doesn't seem to panic when every other bank is making money. then you cave in. you decide to approve more business going to those loans although you caveat that this might exceed risk appetite and gets the board and ceo to formally approve it as well. now the bank is proudly going with the flow and investors are not complaining anymore. the cro isn't there to stop risk, in the same way that hr/ethics and compliance people aren't there to protect people. the big question is : whereto are they dumping toxic loans? i would not put it pst some assholes to sell such "products" off to unassuming private shareholders as a "wonderful investement in business property" for their retirement... probably selling them to our corrupt government... so we can all be left holding the bag i mean, it's proven financial strategy. money is just a number to rich people and if you need more the government will just give it to you. oh they don't need to do that, we've already determined that some companies don't have to suffer the consequences of their own actions because they're "too big to fail" so society has to suffer the consequences. just remember: when they win, they win. when they lose we lose and they still win. our form of capitalism is a fucking joke. socialism for the wealthy owners and rugged individualism for the poors. yep. biggest disappointment about the 2008 crisis was that all the people who caused it were able to go back to work and start doing it all over again i say, if you crash the global economy, you ought to be relegated to fast food service for the rest of your life. mind your expenses and plan to save where possible just in case so.. like always? nothing changed. we are already fucked. please save, and put your money in the bank. you say that like somebody who's never had to choose between rent and food before. i'm saying that the banks, who appear to be struggling, would like you to save your money by putting it in their system. so they may use it. i'm not making any other judgement. that said, no clue where the person i replied to got their apparent quote from, as it does not appear in the article itself. the churn will continue....you become a high paid employee at 50, the new kids get paid 10% below you because you're "senior". then you all get 3% increases. you get retired. they keep getting 3% increases while you don't. suddenly they get paid more than you. you start having trouble paying for stuff because it's so expensive. then suddenly you gotta sell your house to have enough. a newly graduated kid gets paid the same as you, they buy your house. you can't buy a house anymore, so you move to a cheaper area where you can afford something. then you moved again and again. take on stamp collecting as a cheap affordable hobby. blah blah. you end up in a retirement home. then your kids can't afford that. next thing you know you're under a bridge and you love the freedom for like 3 days. then you really wanna shower but you can't. the welfare office is far from the ymca, so you find a walmart cart. a guy shows you where to collect soda cans and where to sell them. you two become friends but he od's.. you inherit his cart. then you help a new guy to find cans with you. so then you od. and the guy in your house is retiring....the cycle continues. the american dream where can i find the used cans? what's that? rich fuckers are worried about being less rich? however will i be able to sleep at night. anyone know how to prepare for 2008 part 2? wait until 2012 part 2 and buy buy buy lol yeah but like with what capital? i expect stocks to crash with it. do i just save in cds? same reason why banks kept giving loans to trump. he had so much debt that their best option for a long time was to just give him more money in the hopes he could use it to earn enough to repay all the loans. sunk cost fallacy at the major financial level. "if you owe the bank $100 that's your problem, if you owe the bank $932,514,634 that's their problem." if you are reading this... it is clearly not "quietly" lol hey, i've seen this one! what do you mean you've seen this? it's brand new. nah, it’s a repost from late 2007. sorry, i mean a repeat of late 2007, the fourth or fifth “once in a lifetime economic crisis” for millennials that will somehow magically end with billionaires owning an even larger percentage of the gdp. “how could this possibly happen, again, again, again, again,” will cry the ~~economists~~ billionaire simps. https://archive.is/ubgcd waitaminit... if a bank sells a mortgage, there obviously has to be a buyer. any buyer who does their due diligence is going to see a mortgage on a commercial office property, and weigh the risks of the borrower defaulting on their mortgage, or the borrower not being able to refinance when the mortgage is due. so given the current environment for commercial offices, any reasonable buyer is going to offer to buy commercial office mortgages at a discount, maybe even at a significant discount, which likely means a financial loss for the bank anyway. so what's the difference if the bank holds on to the mortgage, and if the borrower defaults, then seizing the building, i.e. the real asset, and auctioning it off for whatever it can get? wouldn't the loss on a mortgage default and asset seizure, likely the be about same as the loss as selling to a prospective buyer for the mortgage, a buyer who had properly calculated a discount for the risk into their purchase price? the bank sells it for less, getting the cash now, and writing it off on taxes. that way if they foreclose on it they don’t lose more. some folks have been calling this for a while. the bigger short 2008 all over again now wheeeeere have i seen this before.....? hmmmmmmm... largest print outlet in the us: "look at these guys being quiet" can they dump mine please?
if landlords can’t pay back loans on office buildings, the lenders will suffer. some banks are trying to avoid that fate. credit...chris gash supported by by matthew goldstein matthew goldstein covers wall street and real estate. some wall street banks, worried that landlords of vacant and struggling office buildings won’t be able to pay off their mortgages, have begun offloading their portfolios of commercial real estate loans hoping to cut their losses. it’s an early but telling sign of the broader distress brewing in the commercial real estate market, which is hurting from the twin punches of high interest rates, which make it harder to refinance loans, and low occupancy rates for office buildings   an outcome of the pandemic. late last year, an affiliate of deutsche bank and another german lender sold the delinquent mortgage on the argonaut, a 115 year old office complex in midtown manhattan, to the family office of the billionaire investor george soros, according to court filings. around the same time, goldman sachs sold loans it held on a portfolio of troubled office buildings in new york, san francisco and boston. and in may, the canadian lender cibc completed a sale of $300 million of mortgages on a collection of office buildings around the country. “what you are seeing right now are one offs,” said nathan stovall, director of financial institutions research for s&p global market intelligence. mr. stovall said sales were picking up as “banks are looking to shrink exposures.” in terms of both number and value, the troubled commercial loans that banks are trying to offload are a sliver of the roughly $2.5 trillion in commercial real estate loans held by all banks in the united states, according to s&p global market intelligence.

 search companies login follow some wall street banks, worried that landlords of vacant and struggling office buildings won’t be able to pay off their mortgages, have begun offloading their portfolios of commercial real estate loans hoping to cut their losses. it’s an early but telling sign of the broader distress brewing in the commercial real estate market, which is hurting from the twin punches of high interest rates, which make it harder to refinance loans, and low occupancy rates for office buildings   an outcome of the pandemic. late last year, an affiliate of deutsche bank and another german lender sold the delinquent mortgage on the argonaut, a 115 year old office complex in midtown manhattan, to the family office of billionaire investor george soros, according to court filings. around the same time, goldman sachs sold loans it held on a portfolio of troubled office buildings in new york, san francisco and boston. and in may, canadian lender cibc completed a sale of us$300 million of mortgages on a collection of office buildings around the country. in terms of both number and value, the troubled commercial loans that banks are trying to offload are a sliver of the roughly us$2.5 trillion in commercial real estate loans held by all banks in the united states, according to s&p global market intelligence. but these steps indicate a grudging acceptance by some lenders that the banking industry’s strategy of “extend and pretend” is running out of steam, and that many property owners   especially owners of office buildings   are going to default on mortgages. that means big losses for lenders are inevitable and bank earnings will suffer. start and end each day with the latest news stories and analyses delivered straight to your inbox.