Since spring, investment professionals have been worried about what Federal Deposit Insurance Corporation asset sales of banks closed earlier this year might do to market prices. Bond investors holding Agency MBS, CMO, and CMBS issues have been worried. Silicon Valley Bank assets fetched 77 cents on the dollar.

Bad enough. Now reality is sinking in even deeper. Signature Bank's $33 billion CRE loan portfolio went on sale in September. Now, the Wall Street Journal reported that the properties were expected to sell on the average at 15% to 40% lower than their face price, according to bidders that the Journal spoke with. Bids are due on Thursday.

The majority comprises multifamily properties primarily located in New York City, as GlobeSt.com previously reported. The FDIC said that about $15 billion of the CRE loans secured by multifamily residences, more than 45%, are rent stabilized or rent controlled. They're limited on how much rents can be increased, which limits the net operating income they can deliver, especially as costs of operations keep increasing.