Deutsche Bank has become the biggest commercial property lender in New York City, expanding real estate financing more than a third even as rivals step back in the face of scrutiny from regulators concerned about a bubble.
The German lender – which has ties to Donald Trump, helping fund several of his developments – jumped from fifth place to number one position in 2016 rankings compiled by data specialist CrediFi.
While the city’s wider commercial real estate market shrank 17 per cent last year to $82bn, borrowers secured $5.9bn from Deutsche – 37 per cent more than the year before.
Deutsche has been behind several high–profile Manhattan property deals in a tumultuous period for the Frankfurt–based bank, whose shares hit record lows last year.
This month Deutsche turned to shareholders for €8bn to shore up its balance sheet after reaching a $7.2bn settlement in December with US authorities for mis–selling toxic mortgage securities in the run–up to the 2008 crisis.
Watchdogs are looking at the US commercial real estate sector closely for signs of stress, a decade after the residential housing market meltdown. CRE prices have more than doubled from a 2009 low, according to Green Street Advisors’ Commercial Property Price Index.
Janet Yellen, Federal Reserve chair, has described the valuations as “high” and in its semi–annual Monetary Policy Report to Congress last month the central bank said the sector was an area of “growing concern”.
Several domestic US banks have retreated from CRE lending in New York, a category that includes big apartment blocks as well as offices and retail space.
New York Community Bancorp, ranked number one in CrediFi’s 2015 rankings, shrank its loan amount more than half last year and Morgan Stanley by a fifth. Deutsche leapfrogged JPMorgan Chase and New York–based Signature Bank in the table.
Deutsche, whose commercial real estate business is run by Matt Borstein, declined to comment. People familiar with matter said the German bank had not changed its policy on leverage limits for borrowers and had stepped back from lending to luxury condominiums in New York, widely seen as one of the frothier parts of the market.
Deals done by the German bank in the city last year included 85 10th Avenue, a former cookie factory now home to Google, and 10 Hudson Yards, a 1.8m sq ft office tower built as part of a regeneration of the neighbourhood, according to CrediFi.
According to President Trump’s financial disclosure filings, the bank has lent to the property tycoon’s developments including the Trump National Doral, a golf complex near Miami.