Investors in the US banking sector are increasingly concerned about commercial real estate (CRE) exposure. Deutsche Bank ($DB) reported a gross carrying amount of provisions for credit losses allocated to CRE of 146 million euros, with 121 million euros allocated to North America. This figure is 3X higher than the expected losses on their 31.5 billion euro portfolio. Additionally, 67 of the largest U.S. banks, each with more than $10 billion in assets, have CRE exposure greater than 300% of their total equity, raising alarms amid rising interest rates. Deutsche Bank also took a $350 million loss on a Manhattan office building at 222 Broadway, which was sold for $150 million to a TPG joint venture, a significant drop from the $500 million purchase price in 2014.
$DB takes a $350mn loss on a Manhattan office building 🏢 that likely will be converted to residential "DB paid $500mn for the tower at 222 Broadway in 2014 They just sold the building to a TPG JV for $150mn" https://t.co/g8cM6VZCJo
67 of the largest U.S. banks with more than $10 billion in assets have exposure to #commercialrealestate greater than 300% of their total equity based on data reported to regulators, sparking concern as it comes at a time of increased interest rates. https://t.co/PhBuD2aidT
Fun fact, as per last quarter report, $DB gross carrying amount of provisions for credit losses allocated to CRE was… 146m€! Of that 121m€ allocated to North America This means this loss alone is 2X what they expected to lose on their 31.5bn€ portfolio… IN TOTAL ⚠️🙈 https://t.co/lhFJlZDwbC https://t.co/vKCdU2TCeh
Fun fact, as per last quarter report, $DB gross carrying amount of provisions for credit losses allocated to CRE was… 146m€! Of that 121m€ allocated to North America This means this loss alone is 3X what they expected to lose on their 31.5bn€ portfolio… IN TOTAL ⚠️🙈 https://t.co/6ZZM2YFTJC https://t.co/vKCdU2TCeh
When it comes to commercial real estate, investors in the US banking sector are on edge https://t.co/97yRz2AX0g