Latest Bank Failures Were Casualties Of The Commercial Real Estate Collapse

Silicon Valley Corporate centre

The FDIC seized a staggering nine banks on Friday. At least three of them, all in California, were victims of the CRE collapse.

Square Feet: The three banks all were invested heavily in commercial real estate. Pacific National, as it was mentioned in The Registry article as being a lender on Moffett Towers (phase 2), was also involved in other development deals in the Bay Area spanning from condo developments to office projects by Legacy Partners.

More from The Registry:

The bank, which reported assets of $2.1 billion at midyear, has been in the news in recent weeks following a decision by the Hines company and the California Public Employees’ Retirement System to walk away from the Watergate office complex in Emeryville. CalPERS and Hines, via their National Office Properties LP, borrowed $152 million from Pacific National for the acquisition in 2006. The loan, which was refinanced in 2008, had not been paid down at the time of default, according to commercial real estate research firm Real Capital Analytics.

Pacific National is also a lender against Moffett Towers, the 1.8 million square-foot speculative office complex built by San Francisco’s Jay Paul Co. in Sunnyvale. The development has been completed for months but has failed to retain a single tenant.

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