Signature Bank is Stabilized… Rent Stabilized

Published March 16, 2023

Signature Bank has significant meaning to Maverick Real Estate Partners because it was our first credit and deposit relationship when we founded our business thirteen years ago. Our multifaceted ties remain strong with their team of professionals who are experts in their field. We were surprised when the FDIC took them over, yet expect our relationships to endure however the situation plays out. Much has been reported about Signature Bank in the last few days, yet we’d like to share with you a unique and hopefully helpful perspective as we all navigate this challenging market.

Maverick utilizes data to seek out attractive credit opportunities and develop market intelligence to help inform our decisions. For a high-level perspective, we charted the top Commercial Real Estate (CRE) lenders in New York City since 2018 based on dollar volume and number of transactions below:

Signature Bank is the third largest commercial real estate lender in New York City by total dollar volume, and is the number one lender to the middle market for loans under $100 million. The chart below breaks down Signature Bank’s current New York City CRE portfolio by property type:

While New York City office demand has plummeted causing significant distress, Signature Bank’s office portfolio is only 14% of its NYC CRE book. From what we’ve analyzed, those loans appear to be secure. As noted in the chart above, Signature Bank has 43% of its commercial real estate loans in rent stabilized multifamily. The loans are scattered across the city, as noted on the interactive map below:

Those lighter green dots represent rent-stabilized properties, illustrating how important Signature Bank is to the rent-stabilized market in New York City. Yet rent-stabilized property values have been absolutely crushed over the last four years, due to several factors:

  • Severe Rent Restrictions: 2019 Housing Stability and Tenant Protection Act severely restricted a landlord’s ability to raise rents on vacant units in rent-stabilized properties.
  • Decreasing NOI: Real estate taxes on NYC rent-stabilized apartment buildings have increased by 13.0% over the last four years, while regulated rent growth during that time was only 6.4%.
  • Legal Risk: If landlords do not have complete records that prove that they legally deregulated units, tenants can sue and have rents retroactively reduced to regulated levels.
  • Rising Interest Rates: Interest rate increases have led to cap rates expanding by over 200 basis points.

The net effect is that rent stabilized apartment buildings have decreased in value between 20% to 65% since early 2019, depending on how large the spread is between a building’s regulated rents and market rents. The bigger the spread, the worse the decline.

While Signature Bank is exposed to this dynamic, it wasn’t the only lender to the rent stabilized market, nor the largest. New York Community Bank (“NYCB”) has a portfolio of rent stabilized loans that is 40% greater than that of Signature Bank per the chart below:

The y-axis plots the dollar amount of the rent stabilized loan portfolio of each of the banks. The x-axis is a ratio that takes the same portfolio size divided by the market value of the properties, as determined by the NYC Department of Finance. While not reflective of actual market value, it serves as a reasonable gauge to compare rent-stabilized multifamily portfolios of different banks on an apples-to-apples basis. NYCB’s and JP Morgan’s estimated LTV are meaningfully lower than Signature Bank’s estimated LTV for rent stabilized loans. If Signature Bank exits the market, and other lenders don’t increase proceeds beyond their current standards, borrowers will likely need to contribute equity while private lenders fill the gap. In some cases, loans will need to be restructured or sold at discounts. It should also be noted that Customers Bank and Peapack-Gladstone Bank, while smaller, were far more aggressive in their lending practices when compared to Signature Bank, and may have more fallout when their loans mature.

Rent stabilized multifamily properties in New York City experienced a paradigm shift in 2019. Lenders didn’t meaningfully reconcile issues as the low interest rate environment gave them the option of “kicking the can down the road”. We’re now in harder times, and if Signature is out of the market, there’s more pain coming for us all. Cap rates are high, liquidity is low, and rents are… stabilized.

Maverick Real Estate Partners is an investment manager that invests in real estate credit in New York City. For inquiries about this analysis, please email us at

Note: This analysis, originally posted 3/16/23, was updated on 3/27/23 to incorporate improved data, notably inclusion of more recent DHCR rent stabilization data and additional cleaning of erroneous records in public data sets.

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