Commercial lending

Several community banks noted an uptick in problem loans in second-quarter earnings reports. Small lenders should brace for more of this, industry observers noted.

The Wall Street giant has more than $14 billion of real estate investments, and it took a $1.15 billion hit during the second quarter from writedowns of those bets.

While multifamily late payments were flat, hotel properties continued to improve but office performance deteriorated significantly from the first quarter, the Mortgage Bankers Association said.

The bank's allowance for losses on commercial real estate loans jumped to $3.6 billion in the second quarter — up 64% from a year earlier. The negative forecast could portend trouble for smaller banks that have bigger exposure to the office sector.

Mayor Michelle Wu is offering hefty tax breaks to companies to turn offices into housing, the latest example of a city seeking to address the challenges of remote work hitting downtowns and a lack of affordable residences.

High vacancy rates in U.S. office markets and the impact of rising interest rates on property values in Europe have prompted a brutal selloff in publicly traded real estate stocks and bonds.

Cullen/Frost, Columbia, Synovus, Valley National and Associated all have relatively large exposures to the office sector, which has been hurt by the popularity of remote work. Their executives point to factors that offer protection, including the geographic composition of their portfolios and the types of buildings that serve as collateral.

The amount of distressed assets rose 10% in the first three months of the year, according to a new report from MSCI Real Assets.

The construction manager for the beleaguered New Jersey mall is suing JPMorgan Chase & Co. to recover more than $30 million of unpaid work and accrued interest.

The American Bankers Association's Economic Advisory Committee said access to loans is likely to further soften, while defaults and credit losses could increase in the second half of the year.