Data from FSB members suggests banks and nonbanks collectively provided at least $12 trillion in equity and debt financing to CRE in 2023. While banks remain the main source of such financing, non-bank investors – particularly property funds and REITs – play a significant role in some jurisdictions. The report identifies three main vulnerabilities in these investors:
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From the article"
"The report also highlights the complex interlinkages between banks and non-bank CRE investors. Banks are the main debt providers to, and can also invest in, REITs and property funds. Banks may also have common asset exposures to these investors, which increases the potential for shocks to the CRE market spilling over to the banking sector. "
Good time to re-read John Mauldin’s 2006 essay, “Fingers of Instability.”
Wendy
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