Signature Bank’s loans sold, the market now tests its true strength.

When the FDIC sold equity stakes in loan portfolios previously owned by Signature Bank, market players hoped that the winning bids would shed light on how property values have changed in New York City since the start of the pandemic. However, the final sale prices do not provide clear indications of how asset values have shifted, causing uncertainty for owners looking to refinance or sell their buildings. Market insiders are now closely watching what happens when the winning bidders begin to break up the portfolios and sell or foreclose on individual assets. The auction results are unlikely to prompt a surge in lending and selling activity, as interest rates remain elevated and changes to rental laws have created financial problems for rent-stabilized owners. The market is still waiting to see how the loans will perform in the future and whether they will reset the market.