Capital One is reportedly looking to offload millions in loans attached to New York City real estate. The majority of the debt is nonperforming and tied to office buildings.

JLL is marketing the loans for the Virginia-based bank. They include a $120M portfolio of nonperforming loans backed by five offices in NoMad, Bloomberg reports. The debt on the NoMad offices originated in 2019 and went into default after the principal balance wasn't paid in May, according to Bloomberg.

There is also a $71M portfolio of nine performing loans on the market, backed by pre-war mixed-use properties that feature ground-floor retail and apartments. That debt is maturing in 2024, and the apartments and retail is between 92% and 67% occupied.

In August, Capital One sold a portfolio of about $1B in debt tied to office buildings with a concentration in New York to Fortress Investment Group.

The bank is one of the financial institutions looking to reduce its exposure to commercial real estate as values slide. Goldman Sachs and JPMorgan Chase were reportedly looking to offload CRE-backed debt this summer.

Banks almost doubled their direct lending to landlords to $2.2T during a period of historically low interest rates in the seven years before 2022. But now, loans are increasingly challenged, and banks are expected to continue to withdraw from the market.

For the loans still on banks' books, more and more are being forced to write down their assets' values. New York Community Bank reported a 2,600% increase in nonperforming loans on its books in the third quarter, attributed to loan defaults tied to office buildings in Syracuse and Manhattan.