A handful of banks have recently failed with the biggest being Silicon Valley Bank in Northern California.
This bank is important given that a majority of the venture capital-backed firms in the United States deposit their money there. There was concern last week that people would not be able to access their deposits leading to a bank run (where people rush to take their money out) at the end of the week.
Fortunately, over the weekend the United States Government guaranteed all the deposits even those above the Federal Deposit Insurance Corporation (FDIC) normaly insurance for $250,000 and less.
Ascent is not venture-backed and does not have any money in the banks that have been having any issues. None of our property accounts are at any of those banks as well. So thankfully, this will not affect our deals directly.
While, more banks could fail, we have been in communication with our bank and they are well capitalized to cover their depisites. Additionally, allof our bank accounts have less than the FDIC-insured amount of $250,000 so we are not worried even if our bank runs into any issues.
As for bigger picture, it’s hard to say how this will affect real estate. This may cause the federal reserve to slow their interest rate hikes, however, inflation and employment seem to be high.
We at Ascent as always will keep a close eye on the market and will let you know if anything changes on any of our investments.