This is the biggest bank failure since 2008. Silicon Valley Banks is focused on the start-up ecosystem two days after Signature bank, one of the major banks for commercial lending in New York, shut down due to its cryptocurrency exposure.
On the other hand, Swiss major bank UBS bought credit from its rival Credit Suisse, also a major Swiss bank in an emergency deal of $3.2 Billion.
The major bank crisis in US and globally may cause panic for commercial real estate investors and it might create an impact on the commercial lending and real estate industry, but here are some of the effects in the commercial lending and real estate market if major banks are closing:
1. Credit Crunch – It could lead to a credit crunch if a major bank collapses, making it difficult for some investors to finance their projects. It’s always best to have a backup plan to invest and diversify your funds like consulting with a private lender specializing in commercial lending.
2. Reduced Liquidity – It can reduce the liquidity of the market and can make it difficult to buy and sell the property. It’s better if you can check out asset-based loans like Hard Money lending, which are based on the investor’s property value.
3. Economic Turndown – Some commercial real estate may struggle which can lead to a decrease in demand for commercial spaces, lower rental value, and lower property value.
4. Government Intervention – The government may take measures to prevent a complete collapse of the financial system like bailouts, nationalization of the banks, or overtaking the funds to another bank. However, it would take some time to implement and commercial real estate could suffer.
Overall, the Federal Government is taking precautionary measures to get their deposits and investment and other banks are buying assets like the New York Community banks are buying assets from the Signature bank.
Also, when you are investing in commercial real estate it’s always best to diversify your investment and check with other options like Hard Money loans to finance your commercial property project.
It’s always best to consult with a lender that specializes in commercial real estate lending. With the fast closing rate of as long as 2 weeks and you can get your funds in just 48 hours! Century Capital will definitely be here to provide you with the best services. To know everything about Century Capital Reach Victor Cohen at 201-880-7850 ext 102 or send an email to victor@centurycapitalfinance.com.
