Feature Post

Commercial property prices are a risk for banks and bond investors

(Photo: Getty Images | d3sign)

SINGAPORE — Commercial real estate prices have plunged this year as people stopped going into offices, and retail businesses were disrupted. That could lead to a significant amount of losses for banks, according to a recent report.

In previous downturns, commercial property loan losses were “heavy” and there are worrying signs that such a trend could be repeated this time during the coronavirus-induced slowdown, Oxford Economics’ Adam Slater said in a report.

In a worst-case scenario, Slater said these loan losses would “materially erode” bank capital.

“Large (commercial real estate) price declines generally translate into big losses for banks. Write-offs of (commercial real estate) loans made a big contribution to overall bank losses in the last two major downturns,” wrote Slater, an economist at the firm.

During the 2008 great financial crisis, for example, such loan losses accounted for between 25% and 30% of

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Hot Property: Ellen DeGeneres seeks $40 million in Montecito

Ellen DeGeneres and her wife, actress Portia de Rossi, never seem to stay in one place for too long. A year after shelling out $27 million for a Bali-inspired estate in Montecito, the power couple are looking to sell it for $39.9 million.

DeGeneres and De Rossi have a knack for flipping ultra-luxury homes, and during their short stay, they expanded the idyllic estate and touched up the Bali-style living spaces and the scenic grounds.

Combining three parcels across nine acres, the dramatic compound includes a striking primary residence, spacious guesthouse, cabana, security office, pickleball court and pond. At the edge of the property, an infinity-edge pool overlooks the ocean.

Warm woods draw the eye across the main home, covering the ceilings in the ocean-view great room, the floors in the remodeled chef’s kitchen and the walls in the library. In total, there are four bedrooms and 10 bathrooms in

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Home of the Week: A Mediterranean kingdom on Broad Beach

Spanning an acre on one of Malibu’s most exclusive stretches of sand, this palatial estate is fit for royalty. The 13,500-square-foot mansion — brimming with Venetian plaster and dramatic wall décor — wraps around a courtyard, creating a stunning space with manicured gardens and swirling staircases. Towering palm trees top the backyard, where a patio and swimming pool lead to 120 feet of beachfront.

The details

Location: 31272 Broad Beach Road, Malibu, 90265

Asking price: $42 million

Year built: 2004

Living area: 13,475 square feet, six bedrooms, nine bathrooms

Lot size: 1.09 acres

Features: Ocean-view balconies; clay tile roof; colorful courtyard; arched entryways; voluminous living spaces; marble floors; grand staircase; dining room with mural; movie theater; billiards room; solarium; curved bar; massive owner’s suite; outdoor dining patio

About the area: In the 90265 ZIP Code, based on 52 sales, the median price for single-family homes in August was $3.17 million,

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