News June 04, 2024

Regional Bank Investors Have No Appetite for Hints of Pain

Bloomberg reported that concerns about the property market are pervading the banking system with little clarity on when the pressures may ease up as deposit-taking institutions prepare to contend with a wall of maturing property debt this year that’s estimated at $441 billion. High borrowing costs have walloped real estate valuations, and the uncertainty over when the Federal Reserve may cut rates has exacerbated the challenges. “Things are starting to break a little bit in real estate,” said Josh Zegen, co-founder of lender Madison Realty Capital. “It’ll happen more and more through this year, but you’re starting to see more of that crack.”

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