Pimco Warns of More Regional Bank Failures on Property Pain (1)

Pacific Investment Management Co. expects more regional bank failures in the US because of a “very high” concentration of troubled commercial real estate loans on their books.

“The real wave of distress is just starting” for lenders to everything from malls to offices, John Murray, Pimco’s head of global private commercial real estate team, said in an interview. His division sits within Pimco’s $173 billion alternatives business.

Uncertainty over when the Federal Reserve may cut interest rates has exacerbated challenges faced by the CRE sector, where high borrowing costs have hammered valuations and triggered defaults, ...