Earlier this week Banc of California announced it and PacWest Bancorp would merge in an all-stock deal funded in part by a $400 million equity raise from Warburg Pincus and Centerbridge Partners.

More recently it has emerged that JPMorgan Chase & Co has entered into an agreement with the Banc of California to buy $1.8 billion of single-family residential loans at a discount, sources told Bloomberg.  Banc of California and PacWest plan to sell about $7 billion of loans, mortgage bonds and other assets in their securities portfolios to pay down off $13 billion worth of borrowings, Bloomberg also reported. 

For the CRE industry, there are two important questions. One is what it means for banks in general, as they have been important sources of financing for the industry. The other is what it means for CRE loans, because when banks are ridding themselves of them, their values will fall and that's not good for the future of the industry.

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