Banks Bracing For CRE Defaults
March 23, 2009
An article in Bloomberg this morning provides some additional detail on bank exposure to commercial real estate. Most of the banks seem ready to take on the losses, but they don’t seem too worried, which is quite reminiscent of the early days of the crisis in the residential sector. According to the article:
- The country’s 10 biggest banks have $327.6 billion in commercial mortgages
- Bank of Hawaii, City National Corp, Comerica, aand Sovereign Bancorp Inc. were among the companies put on Moody’s list of lenders with a “negative outlook” on March 12, partly because of their “risk concentrations” in the commercial market.
- Wells Fargo and Bank of America account for about half of commercial mortgages owned by the 10 largest banks
- Office vacancy rates may rise to 16.7 percent this year (from 14.5 percent in 2008) on the heels of increasing unemployment.
- 464 retail properties were seized by banks or in some state of default this month, more than triple the number on Dec. 18
- Citigroup is less exposed to commercial mortgages than its biggest competitors. The bank has $6.6 billion, or 0.9 percent of its loans, in real estate, compared with 12 percent at Wells Fargo, 7.5 percent at JP Morgan, and 6.9 percent at Bank of America.
Similar Posts:
- Goldman Revises CRE Loss Estimates
- Prudential CRE US Quarterly Update
- Biggest Banks Likely Beneficiaries
- Head of Apollo Predicts Bonanza in CRE
- CMBS Ratings Being Reviewed – It’s a Slippery Slope
Well, it looks like this is a moving piece in the puzzle with today’s unveiling of the public-private partnership of the US government.