Goldman Sach’s real estate write downs drove a $1.15bn hit in its second quarter, and have fuelled its desire to sell more assets.
The bank, which has more than $14bn of real estate investments, has not detailed which properties drove the loss, which was spread across equity and debt investments on its balance sheet as well as some consolidated investment entities.
But it has confirmed that offices make up a small percentage of its property bets.
About half of Goldman’s alternative commercial real estate investments are from “historical principal investments” that Goldman “intends to exit over the medium term”, it said.
Chief financial officer Denis Coleman said the firm had conducted a “comprehensive asset-by-asset review” of its commercial real estate portfolio. No single investment represented a particularly big stake, he added.
Commercial real estate represents about $27bn of Goldman’s $178bn in loans, led by $11bn in its warehouses category. The CRE portfolio is 42% investment-grade and had a 0.3% charge-off rate last quarter.
