That forecast is now down to $167 billion to $169 billion. In January, SVB expected average deposits for the first quarter to be $171 billion to $175 billion. 'Client cash burn remains ~2x higher than pre-2021 levels and has not adjusted to the slower fundraising environment,' SVB said. Total client funds have fallen for the last five quarters, as cash burn has continued at a rapid pace despite the slowdown in venture investing. 'Losing a major debt provider in the venture debt market could drive the cost of funds up,' Orn said.Īccording to SVB's mid-quarter update, one of the primary problems the bank faces has to do with the amount of money its customers are spending. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower In Hong Kong, 15% of the most valuable office space sat empty.Best Debt Consolidation Loans for Bad Credit Some German property developers started going bust. took a $1.15 billion hit for bad real estate investments. Vacancy rates for office buildings in major US cities were at records and landlords were walking away from some properties now worth less than their debt, handing them to their lenders. About $1.2 trillion of US commercial real estate debt was “potentially troubled” because of the slump in prices, advisory firm Newmark Group Inc. The MSCI World Real Estate Index fell by a third from the start of 2022 to October 2023, signaling where equity investors believed property values were headed. The crisis has been a slow-motion slide over many months, as most properties are privately held and valuations can take years to adjust to shifts in demand. As prices tanked, the crisis began to affect the wider economy as banks were saddled with soured property loans, hurting their ability to lend, and cities were pockmarked with empty buildings. The troubles were compounded by the rise of home working and online shopping, which sapped demand for big, centralized workplaces and retail spaces. Then central banks jacked up interest rates to tackle a bout of post-pandemic inflation and a lot of properties suddenly looked like poor investments.

Back when money in the bank was yielding almost nothing, commercial real estate became a haven for investors in need of reliable returns.

Bust bank