{"id":1004651544,"date":"2023-03-15T03:07:15","date_gmt":"2023-03-15T11:07:15","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004651544"},"modified":"2023-03-16T09:45:17","modified_gmt":"2023-03-16T17:45:17","slug":"what-signature-banks-shutdown-means-for-nyc-area-cre-market","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/","title":{"rendered":"What Signature Bank\u2019s Shutdown Means for the NYC-Area CRE Market"},"content":{"rendered":"
\"The

Image by mohamed_hassan via Pixabay<\/p><\/div>\n

One significant consequence of Signature Bank<\/strong>\u2019s shutdown is that many New York City area CRE companies will lose their \u201cgo-to\u201d relationship bank.<\/p>\n

\u201cWho will step in to take their place if the\u00a0ship\u00a0does not quickly stabilize?\u201d quipped attorney Eric Orenstein of the law firm Rosenberg & Estis<\/strong>. \u201cIn addition, they were a cash management bank for larger loans, and the industry is now looking to replace the cash management functions of Signature with other banks.\u201d<\/p>\n

The Federal Deposit Insurance Co. took over New York City-based Signature and Silicon Valley Bank of Santa Clara, Calif., after panicky depositors caused runs on both banks. The FDIC has guaranteed that it will \u201cbackstop\u201d all deposits out of the Deposit Insurance Fund, even those that exceed the usual $250,000 limit, and it is in the process of auctioning off the banks\u2019 assets.<\/p>\n

\n

READ ALSO: <\/strong>How a Looming Recession Impacts CRE Deals<\/span><\/a><\/p>\n

\n

As of Dec. 31, 2022, Signature Bank held $33 billion<\/a> in commercial real estate loans, mostly in the New York metropolitan region. Of that total, $19.5 billion was multifamily and roughly $14 billion was commercial. The bank claims to be among the top three multifamily lenders in the city and, at times, the No. 1 lender. After acquiring Boston Private in 2021, Silicon Valley Bank<\/strong>, on the other hand, held just\u00a0$2.6 billion in commercial real estate loans<\/a> in its own region.<\/p>\n

Despite Signature\u2019s outsize presence, however, its collapse is not expected to impact overall liquidity in its primary marketplace. \u201cI think people still have a lot of options,\u201d Orenstein said.<\/p>\n

Customers will probably pay more with other banks, though. \u201cSignature\u2019s margins were lower than average so borrowers should expect a new lender to be pricing terms much higher than Signature did,\u201d said Brian Brady, vice president of Capital markets at Matthews Real Estate Investment Services.<\/strong><\/p>\n

Don\u2019t panic, But Be Cautious<\/strong><\/h2>\n

Both Signature Bank and Silicon Valley Bank were upended last week by their executives\u2019 unfortunate investment decisions.\u00a0In announcing the FDIC takeover and the backstop measure, President Biden said the banks\u2019 executives would be fired and its investors would not be reimbursed. \u201cThey knowingly took a risk and, when the risk didn\u2019t pay off, they lost their money,\u201d Biden said. \u201cThat\u2019s how capitalism works.\u201d<\/p>\n

These bank collapses are hopefully, as Fed chairman Jerome Powell characterized them, isolated incidents. Nevertheless, they have the potential to inspire even greater unease in the real estate capital markets.<\/p>\n

“Money was cheap for quite a long time and so the shock of rapid and sustained rate increases should have meant that the Fed was looking more closely at short-term and long-term obligations of the banks,” Marc Norman, an associate dean at the NYU Schack Institute of Real<\/strong> Estate<\/b> expressed this concern to CPE. “<\/strong><\/em>As their regulator, it is surprising the scrutiny didn’t happen, or the problems weren’t caught, much, much earlier.”<\/p>\n

Richard Barkham, global chief economist at and head of Global Research & head of Americas Research at CBRE,<\/strong> agrees the failures were an aberration brought on by the banks’ specific investment strategies, but, he said, they compound widespread financing struggles for CRE.<\/p>\n

“Real estate capital values, which had already been falling, will be further pressured by an even more tightly constrained credit market,” Barkham said in a prepared statement. “The failure of SVB will particularly exacerbate credit availability challenges in the office sector. Real estate sectors with sounder fundamentals are likely to be less affected.”<\/span><\/p>\n

Furthermore, according to Barkham, the turbulence could increase the likelihood of a moderate recession in the second quarter and may reflect some broader form of instability among the more regional financial institutions, which often do not see the full extent of federal assistance in the event of a collapse, particularly those with many real estate loans.<\/p>\n

Specifically, Brady said, banks with investments \u201cfarther out\u201d on the yield curve could find themselves with distinct liquidity hurdles, Brady said. \u201cI fear that the SVB ‘virus’ could be contagious as we learn more about other institutions’ balance sheets,\u201d he told Commercial Property Executive.<\/p>\n

Consequently, Brady advises caution for creditors and borrowers, and to appropriately adjust their practices. \u201cLenders which adjust credit standards to reflect today\u2019s market will survive,” he said. “A bank failure often leads to stricter underwriting guidelines. While nobody likes a tightening market, a little discomfort today is preferable to a frozen CRE lending system tomorrow.”<\/p>\n

Problems of Perception<\/h2>\n

Harlan Peltz, co-executive chairman at iBorrow<\/strong>, a commercial real estate lending firm, sees the biggest impacts ‘s of SVB failure to be on sentiments in the financial markets. “[It’s] is a relatively small portfolio, so the impact appears to be on perception, and the falling equity prices reflect the market\u2019s attempt to quantify risk across the banking sector stocks,” Peltz said. “But, given the FDIC\u2019s definitive action, I would expect the knock on-effect to be relatively mild and contained vs. what it would have been without intervention.”<\/p>\n

Regarding Signature’s assets, Peltz anticipates a likely shift towards depositors pivoting their investments towards larger banks. “It may cause depositors at small banks to move their deposits to larger banks,” he said. “The borrowing costs will continue to be paid for by the borrowers and the loans serviced by the note owner, regardless of who owns the bank.”<\/p>\n","protected":false},"excerpt":{"rendered":"

Other regional powerhouses will be under greater scrutiny, experts say.<\/p>\n","protected":false},"author":3012,"featured_media":1004651546,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21825,22251,21783,23891,21742],"tags":[32789,51928,34836,35596,51573,51766],"class_list":["post-1004651544","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","category-in-focus","category-investment","category-national","category-latest","tag-cbre","tag-iborrow","tag-marcus-millichap","tag-matthews-real-estate-investment-services","tag-nyu-schack","tag-rosenberg-estis"],"acf":[],"yoast_head":"\nWhat Signature Bank\u2019s Shutdown Means for the NYC-Area CRE Market - CPE<\/title>\n<meta name=\"description\" content=\"Industry experts discuss the recent historic bank failures and their impact on commercial real estate financing.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Signature Bank\u2019s Shutdown Means for the NYC-Area CRE Market\" \/>\n<meta property=\"og:description\" content=\"Industry experts discuss the recent historic bank failures and their impact on commercial real estate financing.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2023-03-15T11:07:15+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-03-16T17:45:17+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/money-3269654_1920.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"912\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Gabriel Frank\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/\",\"name\":\"What Signature Bank\u2019s Shutdown Means for the NYC-Area CRE Market - CPE\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/money-3269654_1920.jpg\",\"datePublished\":\"2023-03-15T11:07:15+00:00\",\"dateModified\":\"2023-03-16T17:45:17+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/cf1bfd2d6753f6ea305911ffd020862c\"},\"description\":\"Industry experts discuss the recent historic bank failures and their impact on commercial real estate financing.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/money-3269654_1920.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/money-3269654_1920.jpg\",\"width\":1200,\"height\":912,\"caption\":\"Image by mohamed_hassan via Pixabay\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.commercialsearch.com\/news\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"What Signature Bank\u2019s Shutdown Means for the NYC-Area CRE Market\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/\",\"name\":\"Commercial Property Executive\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/cf1bfd2d6753f6ea305911ffd020862c\",\"name\":\"Gabriel Frank\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/GF2.jpg?w=90\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/GF2.jpg?w=90\",\"caption\":\"Gabriel Frank\"},\"description\":\"Gabriel Frank is a Senior Associate Editor with Multi-Housing News and Commercial Property Executive. He has a background in journalism, and is the editor of MHN's Daily and Weekly newsletters. He lives in New York City.\",\"birthDate\":\"2000-05-11\",\"gender\":\"Male\",\"jobTitle\":\"Editor\",\"worksFor\":\"Yardi Systems\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/author\/gabriel-frank\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"What Signature Bank\u2019s Shutdown Means for the NYC-Area CRE Market - CPE","description":"Industry experts discuss the recent historic bank failures and their impact on commercial real estate financing.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/","og_locale":"en_US","og_type":"article","og_title":"What Signature Bank\u2019s Shutdown Means for the NYC-Area CRE Market","og_description":"Industry experts discuss the recent historic bank failures and their impact on commercial real estate financing.","og_url":"https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/","og_site_name":"Commercial Property Executive","article_publisher":"https:\/\/www.facebook.com\/CPExecutive","article_published_time":"2023-03-15T11:07:15+00:00","article_modified_time":"2023-03-16T17:45:17+00:00","og_image":[{"width":1200,"height":912,"url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/money-3269654_1920.jpg","type":"image\/jpeg"}],"author":"Gabriel Frank","twitter_card":"summary_large_image","twitter_creator":"@cpexecutive","twitter_site":"@cpexecutive","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/","url":"https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/","name":"What Signature Bank\u2019s Shutdown Means for the NYC-Area CRE Market - CPE","isPartOf":{"@id":"https:\/\/www.commercialsearch.com\/news\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/#primaryimage"},"image":{"@id":"https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/#primaryimage"},"thumbnailUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/money-3269654_1920.jpg","datePublished":"2023-03-15T11:07:15+00:00","dateModified":"2023-03-16T17:45:17+00:00","author":{"@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/cf1bfd2d6753f6ea305911ffd020862c"},"description":"Industry experts discuss the recent historic bank failures and their impact on commercial real estate financing.","breadcrumb":{"@id":"https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/#primaryimage","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/money-3269654_1920.jpg","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/money-3269654_1920.jpg","width":1200,"height":912,"caption":"Image by mohamed_hassan via Pixabay"},{"@type":"BreadcrumbList","@id":"https:\/\/www.commercialsearch.com\/news\/what-signature-banks-shutdown-means-for-nyc-area-cre-market\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.commercialsearch.com\/news\/"},{"@type":"ListItem","position":2,"name":"What Signature Bank\u2019s Shutdown Means for the NYC-Area CRE Market"}]},{"@type":"WebSite","@id":"https:\/\/www.commercialsearch.com\/news\/#website","url":"https:\/\/www.commercialsearch.com\/news\/","name":"Commercial Property Executive","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/cf1bfd2d6753f6ea305911ffd020862c","name":"Gabriel Frank","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/GF2.jpg?w=90","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/GF2.jpg?w=90","caption":"Gabriel Frank"},"description":"Gabriel Frank is a Senior Associate Editor with Multi-Housing News and Commercial Property Executive. He has a background in journalism, and is the editor of MHN's Daily and Weekly newsletters. He lives in New York City.","birthDate":"2000-05-11","gender":"Male","jobTitle":"Editor","worksFor":"Yardi Systems","url":"https:\/\/www.commercialsearch.com\/news\/author\/gabriel-frank\/"}]}},"jetpack_featured_media_url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/03\/money-3269654_1920.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004651544","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/users\/3012"}],"replies":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/comments?post=1004651544"}],"version-history":[{"count":32,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004651544\/revisions"}],"predecessor-version":[{"id":1004652133,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004651544\/revisions\/1004652133"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media\/1004651546"}],"wp:attachment":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media?parent=1004651544"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/categories?post=1004651544"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/tags?post=1004651544"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}