Commercial real estate lending

Some banks with large commercial real estate concentrations are seeing their stock values take a roller-coaster ride as investors discount their assurances about the wobbly asset class.

The bank took a big hit on an office property in Washington, D.C., during the first quarter. This month, it filed a shelf registration statement for an offering of up to $150 million that could be used to bolster capital or refinance debt.

OakNorth Bank in London is eager to utilize the data it's collected from providing risk management software to American banks over the past five years. Its growth plans include eventually acquiring a charter here and making commercial real estate loans.

As recently as a few months ago, many observers predicted a surge of bank mergers this year. But longtime obstacles to dealmaking are still there and have been joined by new ones.

Commercial-property sales have come under pressure over the past year as borrowing rates soared and values plummeted. Sellers and borrowers have often struggled to agree on pricing, given uncertainty around where values sit today.

Washington Trust shares plunged after the Westerly, Rhode Island, company disclosed it booked an office deal in the third quarter, boosting the size of its portfolio while other lenders are pulling back.

Higher interest rates, deposit flight and looming credit losses were roiling the banking industry a few months ago, but so far banks seem to be weathering the storm. That doesn't mean things can't get worse.

The amount of distressed assets rose 10% in the first three months of the year, according to a new report from MSCI Real Assets.

New loan acquisitions fell to their lowest level since 2020, but companies also grew shares of residential securities noticeably over the past three years, S&P Global Market Intelligence said.