Bank failures continue to raise challenging questions for our commercial real estate clients, many of whom do not even have direct business relationships with Silicon Valley Bank or Signature Bank. Signature Bank had a huge presence as a deposit account bank for commercial real estate borrowers and countless deposit account control agreements (DACA's) among real estate lenders, borrowers and Signature Bank (as the deposit account bank) are now in question. The viability of letters of credit issued by these banks as well as other banks teetering on the precipice of bank failure are also being questioned. Fingers crossed that the banking markets will soon calm and the effect on commercial real estate transactions will not be as harmful as this article suggests.
