Debt Disorder

Following the collapses of Silicon Valley Bank, Signature Bank and First Republic Bank and the regulator-arranged proposed takeover of Credit Suisse by UBS, lenders are expected to focus even more diligently on risk management and tighter underwriting standards. Smaller banks and regional institutio...

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Bibliographic Details
Published inCommercial Property Executive (Online) Vol. 37; no. 6; pp. 12 - 13
Main Author Tsarouhis, Fotios
Format Trade Publication Article
LanguageEnglish
Published New York Yardi 01.06.2023
Subjects
Capital costs
Commercial credit
Commercial real estate
Regional banks
United States > US
Silicon Valley-California
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Summary:Following the collapses of Silicon Valley Bank, Signature Bank and First Republic Bank and the regulator-arranged proposed takeover of Credit Suisse by UBS, lenders are expected to focus even more diligently on risk management and tighter underwriting standards. Smaller banks and regional institutions-such as the now-defunct Signature Bank and Silicon Valley Bank-have been more active in commercial real estate lending by the proportion of their loan books, noted Indraneel Karlekar, global head of real estate research and strategy at Principal Asset Management. Upheaval in the banking sector is "unlikely to lead to systemic contagion issues, given the swift steps taken by regulators and central banks," said Karlekar, but there will likely be an increased focus on risk management, including "increased scrutiny of existing debt and future underwriting tied to commercial real estate."