Piles of commercial-real-estate loans at banks may be worth just 77 cents on the dollar — if that

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Published : April 11th, 2023
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MarketWatch/Joy Wiltermuth/3-30-2023

“The sale of $72 billion in assets from the failed Silicon Valley Bank by regulators at a $16.5 billion discount, which pencils out to about 77 cents on the dollar, offers a glimpse into a new clearing price for commercial-real-estate loans.”

USAGOLD note: A number of top-drawer analysts have identified commercial real estate as the next source of problems for the financial system. The problem is similar to the one presented by bank bond holdings. “What everybody has been operating under,” says CapStack’s David Blatt, “is this hold-to-maturity veneer. There’s just no way these things get resolved at par:…”

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