Pactriglo™

A $300 million loan tied to Rising Realty Partners and DigitalBridge’s 42-story tower at 300 South Grand Avenue in Downtown L.A. is heading to special servicing. Read more: https://lnkd.in/ewcHTHbZ Pictured: Christopher Rising, Co-Founder & CEO of Rising Realty #RealEstate #CommercialRealEstate

CIM Group Signs Southern California Gas Company to 198,553-Square-Foot Lease at City National 2CAL https://lnkd.in/gzJpXdJN

California AG alleges RealPage software inflates rental prices, harming renters and distorting the housing market. https://lnkd.in/gcdH2iFc

Bank Losses on Total Securities Portfolio (Q2 2024 Version) On Aug. 15, the FFIEC posted Bank Call Report data for Q2 2024 and today I updated my screen for banks' unrealized losses on their securities portfolios using the newly released Q2 2024 data, calculating unbooked losses on securities and comparing to Common Equity Tier 1 Capital (CET1). See my earlier posts for similar information as of Q4 2022, Q1 2023, Q2 2023, Q3 2023, Q4 2023 and Q1 2024. The losses on the "available for sale" securities portfolio are subtracted from Total Equity Capital as "Accumulated Other Comprehensive Income," but there is an "opt-out" for all but the 22 complex banks choosing the "advanced approach" to regulatory capital. Banks indicate which approach they choose, as indicated by the "Opt-Out AOCI" column. For those banks, I add losses on HTM and AFS and divide by CET1. For advanced banks, I divide losses on HTM by CET1. For comparison, I also present HTM loss divided by Total Equity Capital. Looking only at banks with more than $1 billion in total assets, there are now four "relatively small" banks that reported unbooked securities losses greater than CET1, same as Q1 2024. Republic First is not number one on the list because that bank was closed by the FDIC on Apr. 26, 2024 after holding the number one position for more than a year. Only 47 banks reported unbooked losses equal to 50% or more of CET1, down from 49 as Q1 2024. Clearly, falling rates are benefiting banks that suffered large unrealized losses on their investment securities portfolios. Included on the Q2 2024 list are $2.5 Trillion Bank of America NA (60%), $274 Billion Charles Schwab SSB (64%), and $112 Billion USAA Federal Savings Bank (68%). Two more banks with more than $10 billion in total assets make this quarter's list, down from four in Q1 2024. The rise in interest rates from Mar. 31, 2024 (4.20 %) to June. 30,024 (4.34)% negatively impacted long-duration securities, but several large banks sold underwater securities and realized significant losses, so the aggregate unbooked securities losses on bank balance sheets actually fell by $3 billion from $516 billion at the end of Q12024 to only $513 billion at the end of Q2 2024. Since June 30, when 10-Year Treasuries were yielding 4.34%, the yield has declined by more than 50 basis points to only 3.73% today. This indicates that today’s unbooked losses would be significantly less than at the end of June, below $500 billion for the first time in more than a year. With bond markets expecting additional rate cuts from the Fed during coming months, this is very good news for these banks.

SoCal downpayments: OC is $300,000. Los Angeles, $188,000. San Diego, $183,500. Inland Empire, $48,012. And US? 67,500.

Excited to announce that Pactriglo™ is one of 14 consulting firms on the City of Los Angeles' CAO Office of Economic Analysis panel for Real Estate and Urban Planning. We look forward to the opportunity to provide sound, data-driven insights to City of Los Angeles decision makers.

From government officials to distressed landlords, everyone’s interest is piqued by the potential to convert underused office buildings into residential properties. But fewer than one in six office buildings across the country are actually good candidates for redevelopment. Tap to learn which cities are most primed for office-to-resi conversions.

Bank Nonperforming Loans: 2024 Q2 vs. 2024 Q1 Today, I calculated bank nonperforming loans for the first and second quarters of 2024, for the entire industry and for four size groupings based upon total assets: - less than $1 billion (3,567 banks) - $1 billion to $10 billion (872 banks) - $10 billion to $100 billion (122 banks) - greater than $100 billion (33 banks) I calculated: - total NPLs, - total commercial real estate NPLs, - total nonfarm nonresidential NPLs, - total construction NPLs, and - total multifamily NPLs. The results appear in the table below. My source is the quarterly Report of Condition and Income ("Call Report") filed by each bank with its primary regulator and made available to the public by the U.S. FFIEC. You can download the Call Report for your bank of interest at: https://lnkd.in/g9ikSct6 You can download bulk data for the entire industry at: https://lnkd.in/et4jMyNA For the industry, from Q1 ro Q2 2024: - total NPLs increased by less than $1 billion (0.5%), - total commercial real estate NPLs increased by $4.6 billion (12.4%), - total nonfarm nonresidential NPLs increased by $2.8 billion (8.9%), - total construction NPLs increased by only $0.01 billion (2.2%), but - total multifamily NPLs ballooned by $1.9 billion (50.9%). (Total CRE NPLs are the sum of nonfarm nonresidential, construction and multifamily NPLs.) This indicates that the "tsunami" of CRE NPLs that has been building during the past year now is in plain sight but continuing to rise in volume. Especially shocking it the more than 50% increase in multifamily NPLs, but a 12% quarterly increase in nonfarm nonresidential NPLs translates into an annual rate of increase of almost 50%; in fact, it will be much, much greater. By bank size groupings, the worst performance is observed among the group of "large community banks," which regulators define as having between $1 billion and $10 billion in assets. Among these 872 banks, - CRE NPLs increased by 18% as compared with 12% for the entire industry, - NFNR NPLs increased by 17% as compared with 9% for the industry, -Constr. NPLs increased by 26% as compared with 2% for the entire industry, - MF NPLs increased by 11% as compared with 51% for the entire industry. The group driving the 50% spike in multifamily NPLs is the group of 33 mega-banks (those with more than $100 billion in assets), where MF NPLs rose by $1.8 billion or 93%. Among this group, NFNR NPLs also exceeded the industry average (14% vs. 12%), but Constr. NPLs actually declined by 18% while rising by only 2% for the entire industry. Surprisingly, the group of 122 "regional banks," those with more than $10 billion but less than $100 billion in assets, outperformed the industry (fewer NPLs) in every category except construction NPLs, which grew at 9% vs. 2% for the industry.

CCIM Presentation on the State of Commercial Real Estate and Banking. Here is the presentation.

The latest edition of #TheClosing features Sean Burton, who runs Los Angeles’ largest multifamily developer, Cityview. In TRD's August issue, West Coast bureau chief Isabella Farr sat down with Burton to talk about his public service roots and career switch-ups, L.A.’s challenging regulatory environment and all things #MeasureULA. Read the full conversation: https://bit.ly/3AHxQVD