SVB, Signature Bank failures cause ripples throughout real estate industry

Plus, the Godfather’s home on Lake Tahoe goes up for rent Mar 19, 2023 View in Browser | $1 for 1 Month   POWERED BY   In today’s newsletter we’ll take a look at the two biggest bank failures since the Great Recession. Silicon Valley Bank and Signature Bank had tens of billions of dollars in real estate exposure, including mortgage loans. But the impact could be much wider. Plus, developers press pause in South Florida, a major city with no zoning laws, and a chance to rent a piece of movie history. These and more stories below.   Breaking the banks A rattled real estate industry is assessing the fallout from last week’s bank failures, the two biggest since the Great Recession. Silicon Valley Bank was best known as a bank for tech startups, but SVB had almost [$11 billion in real estate exposure](. Bay Area residential brokers fear the collapse could [bring down the region’s market](. And office landlords are [racing to replace tenant guarantees from SVB](, as many of the bank’s clients are primary office renters in the area. On the other side of the country, New York’s Signature Bank — which purportedly [failed due to a crisis of confidence in its leadership]( — was a [major lender]( for the multifamily industry. An earlier [bet on crypto]( had already impacted its CRE lending, and now those [customers fear a broader contagion](, which could bring down more regional banks and tighten options even more. The worst of the damage will likely be contained to the Bay Area, but real estate pros in [New York City]( , [South Florida](, and the rest of the country are waiting to see the impact on their markets. So far, the broader fallout has centered on the stock market, where banks’ share prices have plunged. Dallas-based [Comerica saw a 25 percent drop]( on Monday, though it has recovered a little since then. The worst of it was in California, where the SEC [halted trading on stocks]( like First Republic Bank, a key real estate lender based in San Francisco, after its share price fell by 70 percent. The bank [secured a $30 billion lifeline]( on Thursday, staunching the bleeding for now.   Advertisement   [I'm an image]( [Brookfield Buying Blackstone’s One Liberty Plaza Stake]( One Liberty Plaza has been a good bit of business for Brookfield, but a bad omen for the office market. In 2018, Brookfield sold part of the Financial District skyscraper to Blackstone at a $1.5 billion valuation. Now, Brookfield is buying it back, but the valuation has plummeted to $1 billion, an alarmingly sharp drop in less than six years. [I'm an image]( [Why Developers Are Delaying New Projects in South Florida]( South Florida developers are pressing pause on new projects, even as demand hits record highs. And it’s not just high interest rates causing construction headwinds. [I'm an image]( [No Surprise: LA Ranks Near Bottom in Residential Permits]( Los Angeles is in the midst of a housing crisis. But, the city has continued to make it difficult for developers to build. The city is among the worst in the country when it comes to issuing construction permits for residential projects.   Advertisement   [I'm an image]( [Brand Studio Find out how Elite Amenity Management’s lifestyle services creates community]( [I'm an image]( [Paul Vallas Rakes in Big Bucks From Real Estate for Runoff]( Chicago’s mayoral candidate Paul Vallas has pulled in major donations from the city’s real estate professionals ahead of the April 4 runoff. Vallas, a centrist, has appealed to Chicago’s business and finance professionals. His opponent, progressive Brandon Johnson, has gone the other route, [proposing a “mansion tax”]( modeled after the recently-passed California law. [I'm an image]( [Houston’s Reputation for no Zoning Isn’t What you Think]( Houston is the largest city in the U.S. without zoning laws. It’s a developer-friendly policy, but it’s also not quite what it seems. A recent amendment to the city’s residential “buffering” law has reignited the conversation about legal barriers to building in the city. [I'm an image]( [Lake Tahoe Home in “The Godfather Part II” Asks $30K Rent]( A piece of movie history can be yours for just $30,000 a month. The Corleone’s Lake Tahoe compound from “The Godfather Part II” hosted some of the film’s most famous scenes, including Fredo’s notorious demise. The rental is down the street from the Godfather’s house, but it includes a dock on the lake where Fredo kicked off his final fishing expedition. A word of advice: don’t tick off the neighbors.   [Facebook]( [Twitter]( [Instagram]( [LinkedIn]( [YouTube]( [Manage Newsletters]( | [Unsubscribe]( | [Privacy Policy]( | [Subscribe]( | [Advertise]( The Real Deal 450 West 31st Street, New York, NY 10001 ©2023 TheRealDeal. All rights reserved. [View Online](