ICSC and Industry Coalition Raise Concerns about Negative Impact of Basel III Endgame Proposal

ICSC recently led a coalition of commercial real estate organizations in submitting a joint letter to financial regulators expressing concerns about the negative impact of the “Basel III Endgame” proposal.

If adopted, the proposal is expected to significantly increase the amount of capital large banking institutions must hold against risk weighted assets, further restricting borrowers access to affordable capital at an already challenging time.

The letter states, in part:

The commercial and multifamily real estate (CRE) industry is a roughly $20 trillion dollar market comprising a variety of income producing property types – apartment, office, retail, industrial, hotel, senior, student, and manufactured housing as well as medical offices, life science campuses, data centers, cell towers, and self-storage properties. Our organizations represent investors, borrowers, owners, lenders, and third-party service providers who participate in a vibrant commercial and multifamily real estate lending environment supporting housing and business across America.

This market is supported by $5.82 trillion of commercial real estate debt1, of which 50% is held by commercial banks. Of that total debt, approximately $2 trillion of CRE loans are maturing over the next four years. Raising capital levels at the largest U.S. banks will only limit credit and feed a downward spiral that will put additional pressure on the financial system.

ICSC was joined on the letter by CRE Finance Council, American Land Title Association, Mortgage Bankers Association, NAIOP, Commercial Real Estate Development Association, National Association of Home Builders of the United States, Nareit, National Multifamily Housing Council, Real Estate Bar of New York and The Real Estate Roundtable.

For more information, contact Moutray McLaren at mmclaren@icsc.com.