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The Bisnow Weekender: Is CRE Really ‘In Trouble’?

Thanks for reading the Bisnow Weekender, my personally curated roundup of the most impactful news, notable quotes, binge-worthy show recommendations and other colorful highlights from the Bisnow world of commercial real estate and beyond. 

Treasury Secretary Janet Yellen is “concerned.”

Federal Reserve Chair Jerome Powell said it is a “manageable problem.”

Starwood CEO Barry Sternlicht said it is facing an​​ “existential crisis.”

You could be forgiven for thinking they are talking about the entire multitrillion-dollar U.S. commercial real estate ecosystem, especially after The New York Times delivered this thought-provoking analysis of the situation: “Commercial Real Estate Is In Trouble. Here’s What To Focus On.”

But the story failed miserably on the headline. The thing everyone is focused on, almost exclusively, is the deeply troubled U.S. office market. That’s what Yellen, Powell, Sternlicht and The New York Times (headline aside) are actually talking about right now.

This knowledge is marrow-deep to anyone who works in real estate: Office is the “one asset class that never recovered,” Sternlicht said.


On CNBC this week, Squawk Box anchor Rebecca Quick asked Minneapolis Fed President Neel Kashkari to comment on “commercial real estate” and the notion that “the entire industry will tell you they are in big trouble,” especially as office owners shakily attempt to refinance loans. 

“Well, we’re paying attention very closely to it,” Kashkari said. “I do want to make one adjustment to what you just said. It’s not commercial real estate across the board. It really is focused on the office sector. Many other segments across commercial real estate seem to be doing very well. And so I think that delineation is important.”

Nearly 45% of U.S. office properties are underwater on their loans right now, according to the National Bureau of Economic Research. In December, in an oblique reference to the historic collapses of Signature Bank and Silicon Valley Bank, that same research suggested further bank failures could be on the horizon. That’s because CRE loans, a huge chunk of which is office-related, account for about $2.7T in aggregate bank assets across America.

Enter New York Community Bank. 

As Bisnow reported, NYCB’s fourth-quarter earnings report this week revealed a $252M loss related to New York office and multifamily loans on its books. The bank cut its dividend by 70% to build its reserves to brave future loan losses. NYCB’s stock nose-dived by 60%, Moody's Investors Service cut the bank's credit to junk status, and the bank picked a new chairman to prop up what NYCB claims is a “strong liquidity position.”

NYCB grew significantly last year. The bank’s assets swelled past $100B after it purchased the assets of Signature Bank. NYCB is the latest bank to be squeezed by CRE, and its losses are directly related to commercial real estate — and the larger issues facing the industry. 

Myriad disturbances are taking their toll across the entire real estate plain, from the work-from-home movement to interest rate gazing to pricing uncertainty to population migration and global and domestic politics, and much more. 

However, in this bumpy, brutal economy, the commercial real estate recovery is fully underway: Multifamily development is surging at its highest pace since 1996, U.S. shopping center vacancy is at its lowest point since 2007, artificial intelligence has accelerated an already-white-hot data center sector, and hotels haven’t had this many new projects in the pipeline since 2008.

And finally, Green Street had this to say this week: “For most property types, pricing has probably hit its low. … Office is an exception to that.”

So, office aside, do you think “commercial real estate” is in trouble? Write to me at and let me know what you think. I’ll publish your perspectives in the next Bisnow Weekender.

— Mark F. Bonner, Bisnow Editor-in-Chief



The Best Of Bisnow News: Feb. 5-9

Investors Seek To Shut Down CrowdStreet After Nightingale Fiasco — Atlanta Reporter Jarred Schenke and Deputy Managing Editor Ethan Rothstein

As the Nightingale Properties saga continues to unfold, spurned investors are pushing to shut down CrowdStreet, claiming they lost over $1.5M in misappropriated funds and are entitled to $3M in damages.

Attorneys representing dozens of investors accuse CrowdStreet of acting as an unlicensed broker-dealer, performing insufficient due diligence and failing to protect investors' funds by not requiring escrow accounts for deals. 

The claim, which was first obtained by Bisnow, was filed last month.

The attorneys said in an interview they won’t wait to see if Nightingale CEO Elie Schwartz makes good on his promise to pay investors back over the next three years.

“I can't imagine a scenario where somebody in Schwartz’s position is going to be able to make this right. You don't take investor money and trade First Republic Bank options with it,” said Joseph Wojciechowski, a Chicago-based securities litigator. “That he's going to end up with handcuffs on eventually is, I think, pretty clear at some point, which will make paying back these investors from his stake impossible. It's not realistic for the investors to sit and wait.”


NYCB’s Credit Is Now Junk. Its Stock Fell 60% This Week. What Does This All Mean For CRE? — Los Angeles Reporter Bianca Barragán

Why does this keep happening? 

Regional banks have more exposure to commercial real estate loans than their larger counterparts. Among banks with less than $100B in assets, which NYCB was before it took on Signature’s assets, CRE loans account for 44% of total bank credit, whereas these loans make up 13% of total credit for banks with more than $100B in assets. 

As CRE loans come to maturity in a higher-interest-rate environment and with the values of many properties, especially offices, in question, they may have difficulty refinancing their properties or paying their debts. 


This Common CRE Lending Clause Can Put A Property In Default — Even If The Borrower Is Paying — National Reporter Dees Stribling 

With more than $2.2T in U.S. commercial property loans coming due by the end of 2027 and real estate fundamentals weak, the relationship between lenders and their CRE borrowers is likely to become even more fraught than it is. As maturities loom, both sides are searching for an edge.

One potential advantage lenders possess is murky covenants in loan documents known as material adverse effect clauses. Though the clauses can be quite complex, they can, in theory, allow a lender to put a loan in default even if payments are being made because there has been an event that adversely affects the underlying property or other collateral, such as a drastic devaluation.

“It's one tool in the toolkit of lenders,” said Trilogy Law Managing Partner Fran Mastroianni, a real estate development and finance specialist based in Massachusetts. “It's there and can be invoked, and it's something that lenders can bring to the table when negotiating with borrowers.”


More Big News From The Week …

Adam Neumann Seeks To Buy WeWork, Partners With Hedge Fund Manager Daniel Loeb

2 Multifamily Owners Settle In RealPage Price-Fixing Lawsuit

‘It Shut Down The Deal’: High Multifamily Insurance Rates Threaten Transactions, Strain Budgets

Developer Who Amassed $10B Condo Portfolio Indicted In Multimillion-Dollar Fraud Scheme

Darcy Stacom, 'Queen Of The Skyscrapers,' Leaves CBRE To Start New Firm

Newmark Brings Back Robert Futterman After 2019 Firing


My Slightly On/Off-Topic Media Diet: Super Bowl Edition

An Average NFL Game: More Than 100 Commercials And Just 11 Minutes Of Play (Quartz): “The 11 minutes of action was famously calculated a few years ago by the Wall Street Journal. Its analysis found that an average NFL broadcast spent more time on replays (17 minutes) than live play. The plurality of time (75 minutes) was spent watching players, coaches, and referees essentially loiter on the field. An average play in the NFL lasts just four seconds.”

NFL-Record 68 Million Americans To Bet On Super Bowl (Reuters): “A record 67.8 million American adults are expected to bet $23.1 billion on Sunday's Super Bowl matchup between the Kansas City Chiefs and San Francisco 49ers, the American Gaming Association said on Tuesday. The number of American adults planning to bet on the NFL's title game is up 35%.”

How Quickly Did 31 QBs Earn Brock Purdy’s $870K? (ESPN): “Brock Purdy has gone from the 262nd and final pick of the 2022 NFL draft to No. 1 quarterback for the San Francisco 49ers to a starter in Super Bowl LVIII. … Purdy is arguably the NFL's best value — at $870,000, his 2023 total cash compensation (salary plus bonuses) was tied for last among Week 1 QB starters.” Twenty NFL quarterbacks make all of Purdy’s salary and some in less than one game. One of those quarterbacks is in the Super Bowl this Sunday with him. Patrick Mahomes earns all of Purdy’s salary in about 11 minutes.

Peter Schrager's Incredible Super Bowl Picks Streak Is Still Alive: Here's Who He Has This Year (USA Today): “His streak of predicting the champion lives on in year five, and this time, he's correctly predicted both teams competing in Super Bowl 58. ‘It'll be 49ers vs. Chiefs in Vegas,’ Schrager said in September. ‘The winner, with the exact score being 34-28, and with second-year cornerback Trent McDuffie returning a pick-6 late in the fourth quarter, the Kansas City Chiefs will yet again be your Super Bowl champion.’”

Taylor Swift Has Inspired Gen Z To Take Interest In The Super Bowl (The Daily Mail): “Taylor Swift has made 24 percent of Gen Zers increase their interest in football this season, as 31 percent of them will now root for the Chiefs in Super Bowl LVIII, even though 15 percent of Americans hate what the singer has done to the NFL.”

A Last-Minute Trip To What May Be the Priciest Super Bowl Ever (NYT): “Around $9,859 Per Person.” 


Jay Rickey’s Betting Guide For Super Bowl LVIII

Tails won last year. Tails has actually won four years in a row and has won in more Super Bowls than heads. It's time for heads (-105). 

The over/under for the length of Reba McEntire's national anthem is a minute and 30 seconds, one of the lowest over/unders for this bet ever. Chris Stapleton sang for more than 2 minutes last year. I've read Reba is known for singing really fast national anthems, but 1:30 is too fast for me. Took the over.

I’ve also seen that Usher playing Yeah for his first song at halftime is +300. That's a fun one. Why not?

Travis Kelce winning the MVP, proposing on the field after the game and America going nuts is, well, I can't seem to find odds for this, unfortunately. But Kelce winning MVP is +1300. I don't really think he'll win, but I had to work him and Taylor Swift into this write-up somehow.

Shortest touchdown is less than 1.5 yards (-150). All we need is pass interference in the end zone, which puts the ball at the 1-yard line and sets up a short run for Pacheco or McCaffrey. Odds aren't awesome, but I like this bet.

Speaking of McCaffrey, my son, Max, has been much better at picking bets this season than I have. He really likes the star 49ers running back to have 2 or more touchdowns at +230. He also likes the Rashee Rice anytime TD bet (+135).

I'm on the under for Patrick Mahomes' passing yards (262.5) and over on Deebo receiving yards (58.5), but Max likes the under on Deebo. I've sprinkled a little on the third quarter to go over 9.5 points, and I liked the odds on Kansas City winning the first half and San Francisco winning the game (+700). 

Happy betting!

— Jay Rickey, Bisnow Director of Newsletters


Bisnow Weekend Interview Preview

As the son of Clayco founder Bob Clark, you might say making buildings happen is in CRG CEO Shawn Clark’s blood. Bisnow Chicago reporter Ryan Wangman spoke with Clark about growing up in the industry, his process for constructing new deals, where CRG is going next and his efforts to raise nearly $8M to research the rare disease that took his mother’s life.

Bisnow: What are the opportunities right now that you feel like others might be overlooking?

Clark: We maintain our long-term conviction in industrial, multifamily and student housing. The data center space is probably just beginning as you start to really understand the computing power necessary for AI and the nuances of AI versus cloud storage and its flexibility of where it can really go.

One of the things that I’ve learned from getting to go through a couple cycles now is there’s a risk in herd mentality. Right now, we’re obviously working through a little bit of extra supply in certain markets where everybody went to after the pandemic or certain asset classes that everybody focused on after the pandemic. We’re staying steady on where we have long-term conviction but also being more comfortable with a contrarian approach.

The Weekend Interview goes live every Friday evening — head to over the weekend to check it out!

Jobs! Jobs! Jobs!

Here are this week’s top jobs over at Bisnow's careers platform, SelectLeaders. Reach out to SelectLeaders Managing Director Ryan Neale to learn more. You can email him at

President of Commercial Real Estate — Oversee and manage a geographically diverse commercial real estate portfolio (office, retail, industrial, data centers) for an Alaska Native Corporation.

Vice President of Acquisitions and Development — Lead the evaluation and assessment of real estate acquisitions, divestitures and development for a prominent West Coast affordable housing firm.

Director of Asset Management — Oversee a prominent West Coast affordable housing portfolio. 

Vice President of Acquisitions and Asset Management — Lead acquisitions and asset management for a premier Southeast owner-operator.


Hey, Jarred, What Are You Going To Binge This Weekend?

I’m dying to finish the second season of Reacher. And with only two more episodes to go with the Amazon Prime series, I’ll get there by Saturday evening, I’m sure. I think the studio has done a bang-up job with the Lee Child novels so far, and Alan Ritchson feels born to play the Jack Reacher character (not that I’m dissing Mr. Tom Cruise, but Reacher he wasn’t). Beyond that will be my sporadic views on YouTube, watching cooking videos — especially Max Miller’s Tasting History series — and falling asleep listening to some '80s music on Spotify.

 — Jarred Schenke, Bisnow Atlanta Reporter


Upcoming Bisnow Events And Webinars

Tuesday, Feb. 13 (San Francisco): San Francisco Multifamily & Affordable Housing Conference

Tuesday, Feb. 13 (Dallas): The Future of DFW Master-Planned Communities

Thursday, Feb. 15 (Reston, Virginia): Future of Reston & Herndon


How did I do? You can send all love letters and dissents directly to me at

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