2023-07-19 23:17:00
It’s a tough time to be in the real estate business. Goldman Sachs Group is feeling some pain, too.
Goldman is not the largest real estate lender, but has invested more than $14 billion in real estate. Write-downs on those investments hit pre-tax earnings related to principal investments in the second quarter by $1.15 billion.
The bank did not specify which properties caused the losses related to both equity and debt investments. At the same time, during the company’s April-June results presentation, he also prepared slides on commercial real estate (CRE) exposure, explaining that offices accounted for a small portion of total CRE loans.
Property owners struggle with the impact of skyrocketing borrowing costs, but office owners have been hit particularly hard as more remote work reduces demand for office buildings.Brookfield Asset Management and others will not be obligated to pay CRE loans.unable to fulfill。
Related article
Goldman Sachs announces April-June (second quarter) results on 19th
Source: Bloomberg
Chief Financial Officer Dennis Coleman said in an online conference call with analysts on Wednesday that he had conducted a “comprehensive individual asset valuation” on the CRE portfolio and said there were no stand-alone investments with particularly high exposure. Stated.
About $27 billion of Goldman’s $178 billion in loans are related to CRE. The $11 billion worth of the warehouse category dominates. 42% of the CRE portfolio is investment grade, with a 0.3% charge-off rate in April-June.
Original title:Real Estate Woes Drive Billion-Dollar Hit for Goldman Sachs (1)(excerpt)
(Updates with CFO explanation, etc.)
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