Median home prices are now contracting at levels NEVER seen in 60 years
Source: Win Smart
What is the exposure of German banks to us commercial real estate?
According to Moody's, Aareal Bank & Deutsche Pfandbriefbank have the largest exposure compared w/their capital levels. The shares of Deutsche Pfandbriefbank, which is the most shorted in Germany, have recently lost a quarter of their value. In case of Deutsche Bank, there is a gap between banks' exposure to US specialized lending and exposure to banks' US CRE book as DB engages to a material extent in other asset-based or project lending that would also qualify as specialised lending, according to Moody's. Source: Dekabank, HolgerZ
From The Markets article on US banks’ portfolios of commercial real estate:
“Bloomberg’s review found 22 banks with $10 billion to $100 billion of assets hold commercial property loans three times greater than their capital. Half of those firms had growth rates surpassing the thresholds laid out by regulators. The tally was even higher among banks with less than $10 billion of assets: 47 had outsize portfolios, of which 13 had swelled rapidly. The analysis excludes loans for nonresidential buildings that are occupied by their owners.” Source: Bloomberg
On CRE
Source: Bloomberg
Deutsche Bank AG's provisions for losses in US Commercial Real Estate were more than four times bigger in the last quarter
Source: Laurentiu B., Bloomberg
In the last week - Commercial Real Estate Stress
- New York Community Bank (USA) - Aozora Bank (Japan) - and now: *Deutsche Pfandbriefbank, under pressure in Europe, more real estate cracks, banking concern, etc" Source: Bloomberg, Lawrence McDonald
A Los Angeles office building just sold for 52% less than its price five years ago.
The office building was originally purchased in 2018 for $92.5 million. Now, it sold for $44.7 million even after over $11 million in renovations. Just weeks ago, the Aon Center in downtown LA sold for $147.8 million, 45% less than its previous purchase price in 2014. Source: The Kobeissi Letter
Evergrande, which has now been ordered to liquidate, has an astonishing $300 billion in liabilities.
That places it near the very top of the all-time list of corporate bankruptcies. A lot of Evergrande's liabilities are down payments that Chinese homebuyers made on apartments that remain unbuilt. But even just looking at the bonds and loans outstanding, the amount is greater than $80 billion. Source: TME, Axios
