Commercial Real Estate Having More Than Just Money Issues
Commercial real estate investors may feel the trepidation of an impending economic downturn. Lenders anticipate an increase in bad loans within their portfolios, potentially impacting their capacity to provide financing in a tight lending environment. Institutional estimates of how many bad loans exist continue to rise quarter-over-quarter. Blackstone Group's commercial mortgage unit raised its forecast from $125 million at year-end 2021 to $326 million the prior year. As a result, bank losses on loans rose 25% during that time, from $289 million to $365 million. There are other banking concerns as well. For example, what will become of Signature Bank's commercial real-estate loans after NYCB decides not to purchase them following its collapse? NYCB was believed to be the perfect buyer for these loans due to being the largest lending institution in rent-stabilized markets. However, people familiar with the market believe no other institutional investment firm will step in and