Deja vu of the banking crisis? The sell-off in regional bank stocks is likely to worsen on Wednesday after Moody's downgraded New York Community Bancorp's credit rating to junk bond levels.Investors are growing concerned about the woes of the U.S. commercial real estate sector as a vital lifeline built during last year's banking crisis expires.NYCB shares fell as much as 15% in premarket trading after the downgrade but later rebounded. Shares have plummeted about 60% in the past week since the bank said it was suffering from a downturn in its business, partly due to poor performance in commercial real…
Author: Private Lending Agent
Key Takeaways New York Community Bancorp defended itself late Tuesday after Moody's downgraded the bank's credit rating. The high-interest rate environment is putting pressure on the entire commercial real estate sector, which in turn is straining the regional banks that lend to much of the market. Experts and regulators said the bank may be in a unique situation because of its concentration of lending in rent-regulated multifamily buildings. Despite broader pressures in the commercial real estate market, experts and regulators believe problems like that of New York Community Bancorp Inc. (NYCB) may be isolated. Moody's on Tuesday downgraded New York…
The current real estate investment environment is characterized by volatility and change. Factors such as global economic fluctuations, policy changes, and market trends are influencing investment strategies. Cap rates are not only important in assessing the potential returns and risks of real estate investments, but also provide insight into the profitability and attractiveness of a property. Lower cap rates are generally considered to be lower risk and more stable areas, while higher cap rates represent higher risk and potentially higher returns. However, to understand current cap rates, we also need to understand the factors that influence cap rates, so we…
Flash Sale Don't miss this great opportunity Standard Digital Access $3 per year Already a subscriber? Log in Treasury Secretary Janet Yellen, testifying before the House Financial Services Committee, said commercial real estate losses were a concern but that U.S. regulators were working to ensure loan loss reserves and liquidity levels in the financial system were adequate to cope. (AP Photo/Manuel Balce Senator) Christopher Condon, Victoria Dendrinow | Bloomberg Treasury Secretary Janet Yellen said the commercial real estate losses were a concern but that U.S. regulators were working to ensure loan loss reserves and liquidity levels in the financial system…
What are the world's commercial insurance rates? | Insurance Business America Insurance News What are the world's commercial insurance rates? Marsh Releases Latest Edition of the Global Insurance Market Index Insurance News Terry Gancuanco Marsh has released the latest edition of its World Insurance Market Index, a proprietary measure of global commercial insurance rate changes at renewal time. Global commercial insurance premiums rose 2% in the fourth quarter of 2023, after increasing 3% in the third quarter, according to Marsh. “Premium rates remained relatively stable across most regions in the fourth quarter,” Marsh noted. “As in the third and second…
Regional banks have been setting aside more capital to protect against future losses in commercial real estate, and some analysts worry it's not enough.Shares of commercial real estate lender New York Community Bancorp (NYCB) fell 22% on Tuesday and are now down nearly 60% since the company stunned Wall Street last week by cutting its dividend and reporting a quarterly net loss of $252 million.The turmoil surrounding the $116 billion bank is stoking new concerns about the industry's vulnerability to office buildings and apartment complexes that have suddenly seen their values plummet due to high interest rates and changing work…
The decline of commercial real estate is complicated: Not only will landlords lose money as leases are cancelled or expire, but the banking industry could also take a hit as buildings sit empty and lose value. Indeed, Federal Reserve Chairman Jerome Powell is concerned that the struggling commercial real estate market is only just beginning to affect banks. “This seems like something we're going to be dealing with for years,” he said in an interview on CBS' 60 Minutes on Sunday, adding that “this is a pretty big problem,” but that it's a “manageable problem” that will likely affect smaller…
Dive Overview: Treasury Secretary Janet Yellen said Tuesday that commercial real estate losses could put financial institutions under “significant stress” as loans come due, vacancy rates in some cities remain high and interest rates remain at 23-year highs. Federal regulators are working to ensure that banks struggling to lend to commercial property owners have sufficient liquidity, can cut dividends and build loan loss reserves if necessary, Yellen said in testimony before the House Financial Services Committee. “The rising interest rate environment and, in some cases, particularly for office buildings, changes in work patterns due to the pandemic and vacancy rates…
Andrew Houhoudt, Donghoon Lee, Daniel Mangrum, Joel Scali, Wilbert van der Klaauw, Crystal Wang The New York Fed's Microeconomic Data Center released its quarterly report on household debt and credit for the fourth quarter of 2023 this morning. Household debt balances increased by $212 billion last quarter. Most types of loans saw increases, but they were modest compared to the fourth-quarter changes seen in past years. Mortgage loan balances increased by $112 billion, and home equity line of credit (HELOC) balances increased by $11 billion as borrowers used the equity in their homes instead of refinancing their first mortgages. Credit…
At today's meeting, the Board decided to maintain the cash rate target at 4.35 percent and the interest rate paid on exchange settlement balances at 4.25 percent. Inflation continues to moderate but remains elevated. Inflation continued to decline during the December quarter. Despite this progress, inflation remains high at 4.1%. Goods price inflation was below the RBA's November forecast. It continues to fall, reflecting the easing of disruptions to global supply chains and moderating domestic demand for goods. However, services price inflation has fallen at a more moderate pace, in line with the RBA's previous forecast, and remains high. This…