Val-Add Real Estate Partners

Large Bank's Total Exposure to Commercial Real Estate (Updated with 2024-Q3 Data) Many astute commentators about the banking industry have been warning about future losses on commercial mortgages as hundreds of billions reprice in the current high-rate environment. I have calculated the total CRE exposure (CRE nonfarm-nonresidential and multifamily mortgages, plus CRE construction loans plus unused CRE commitments) as a percentage of total equity as a broad measure of bank exposure to commercial real estate. This ratio is used by banking regulators to assess CRE exposures; any ratio over 300% is viewed as excessive exposure to CRE. Data are as of Sep. 30, 2024. Below is a list of the total CRE exposure of the 64 banks with greater than $10 billion in assets where their exposure exceeds 300% of total equity capital. (64 out of 155 large banks, 4,572 banks of any size.) Two have exposures greater than 600% of equity, nine have exposures greater than 500% of equity, and 29 have exposures greater than 400%. Most prominent are Flagstar Bank, Zion Bancorp, and Valley National Bank, each of which has more than $50 billion in total assets. Flagstar has $114 billion in assets, $44 billion in CRE mortgages (of which $35 billion are multifamily), $2.1 billion in CRE construction loans, and $1.7 billion in unused CRE commitments, for a total CRE exposure of $48.2 billion, but has only $8.9 billion in total equity. Total CRE exposure is 539% of total equity (down from 554% of total equity as of Q2). Zion has $87 billion in assets, $19.4 billion in CRE mortgages, $2.6 billion in CRE construction loans, and $3.0 billion in unused CRE commitments, for a total CRE exposure of $25.4 billion, but has only $6.4 billion in total equity. Total CRE exposure is 298% of total equity. Down from 440% in Q2 thanks to a significant increase in total equity. Valley NB has $62 billion in assets, $27.7 billion in CRE mortgages, $3.2 billion in CRE construction loans, and $2.1 billion in unused CRE commitments, for a total CRE exposure of $33.1 billion, but has only $7.5 billion in total equity. Total CRE exposure is 442% of total equity. Down from 462% in Q2. Among banks of any size, - 1,697 have total CRE exposures greater than 300%, down 152 from Q2. - 971 have exposures greater than 400%, down 125 from Q2. - ?426 have exposures greater than 500%, down 110 from Q2. - ?166 have exposures greater than 600% down 133 from Q2. For comparison, the aggregate industry total CRE exposure is 132% of total equity ($2.23 trillion vs. $2.45 trillion). Down from 138% in Q2 2024. These statistics are based upon my calculations using publicly available Call report data downloaded from the FFIEC's Central Data Repository as of Nov. 16, 2024. Many more posts on other banking data during next few weeks. Most of these lists will be available for download at FAU's Banking Initiative Website: https://lnkd.in/eA8hsQuu

Midtown Development Opportunity with Empire State Building Views | 150K +/- BSF Potential | 125' of Frontage Send me a message or follow the link for more information: https://lnkd.in/ecANmHcd GauRav Khanna Avison Young | US Capital Markets Alexandra Marolda Charles Kingsley Eric Karmitz Brandon Polakoff Kyle Sabath #realestatedevelopment #nycrealestate

?? Harrisonburg Loan Closing! We’re excited to announce the successful closing of the Harrisonburg loan! We are now ready to start building a 3-story climate-controlled self-storage facility in a high-demand area, offering incredible visibility and strong market fundamentals. Facility Details: Units: 660 Total NRSF: 74,450 This development is poised to meet the needs of the growing Harrisonburg community. We would like to express our sincere appreciation for the support that made this project possible. Your dedication has played a vital role in bringing this project to life. Thank you to everyone involved in making this happen. We look forward to seeing this project come to fruition!

?? Harrisonburg Loan Closing! We’re excited to announce the successful closing of the Harrisonburg loan! We are now ready to start building a 3-story climate-controlled self-storage facility in a high-demand area, offering incredible visibility and strong market fundamentals. Facility Details: Units: 660 Total NRSF: 74,450 This development is poised to meet the needs of the growing Harrisonburg community. We would like to express our sincere appreciation for the support that made this project possible. Your dedication has played a vital role in bringing this project to life. Thank you to everyone involved in making this happen. We look forward to seeing this project come to fruition!