That Deutsche Bank is trying to offload up to $1 billion in CRE loans off its balance sheet, as Bloomberg reported. But a major institution looking to sell off CRE loans isn't a surprise. In a way, that's ultimately good news for commercial real estate.
The Canada Pension Plan Investment Board sold off interests in some CRE developments, including a share in a Manhattan redevelopment project for $1. The California State Teachers' Retirement System took a 9% loss on its real estate portfolio in 2023. Late last year, some large banks — like an affiliate of Deutsche Bank as well as Goldman Sachs — started offloading CRE loan portfolios, as the New York Times reported. This year Canadian Imperial Bank of Commerce (CIBC) and Washington Federal Bank (WaFd) both sold significant blocks of loans to other institutions.
Nathan Stovall, director of financial institutions research for S&P Global Market Intelligence, told the Times that "banks are looking to shrink exposures."
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