Jessica Rascionato, Head of Commercial Real Estate (CRE) at Citizens Bank, is responsible for the bank's national CRE strategy, which encompasses a portfolio of $25 billion. Her focus is on capital flows, financial trends, and the ongoing analysis of macroeconomic developments. Rascionato has served as a leader at the bank for nearly a decade, navigating the institution through significant events such as the COVID-19 pandemic, the $3.3 billion acquisition of Investors Bancorp in 2022, and the regional banking crisis of 2023. The current macroeconomic dislocation, characterised by higher tariffs, high interest rates, inflation, and the war in Iran, also falls within her remit.
In an interview with Commercial Observer, Rascionato offered insights into her career, the current CRE market, and the specifics of Citizens Bank. She also explained how she acquired the ability to speak four languages.
Career Path and Role at Citizens Bank
Rascionato began her professional career in financial services after studying humanities. She initially worked as a translator in Moscow and New York before transitioning into the banking sector through her language skills – she is fluent in Russian, Italian, and French. Her career led her through international finance positions at Société Générale and an MBA from Columbia Business School to GE Capital, where she spent almost 15 years in various roles. Ten years ago, she joined Citizens Bank, initially serving as Head of Underwriting and Portfolio for the Corporate Bank. Three and a half years ago, she took over leadership of the commercial real estate business.
Development of Real Estate Strategy and Market Dynamics
Citizens Bank's internal market analysis differentiates between the pre-COVID-19 and post-COVID-19 periods, which aligns with developments over the past decade. In the late 2010s, the real estate market was characterised by high activity, low interest rates, ample liquidity, and low losses. Paradigm shifts, such as those observed today in the office segment, were rare at the time. Loan growth was substantial from a banking perspective, including Citizens Bank. However, the COVID pandemic brought things to a standstill, intensified by the so-called 'maturity wall' and the decline in liquidity in the CRE sector. The combination of post-COVID adjustments in the office sector and the interest rate hike cycle starting in 2022 drastically slowed the reallocation of balance sheets. The real estate market largely came to a halt, and banks issued fewer new loans as capital held on the balance sheet was not being rotated.
A key strategic aspect for Citizens Bank was the acquisition of Investors Bancorp in April 2022, which doubled the bank's real estate portfolio from approximately $15 billion to $30 billion. This acquisition proved advantageous, as while the office segment was the largest portfolio component pre-COVID, multifamily properties became the dominant property type after the acquisition. Given the developments in the office market in recent years, this represented a significant advantage. While ten years ago loan growth in a low-interest-rate environment was a priority, today greater caution is warranted.
Rascionato reports that despite a macroeconomic environment marked by concerns – caused by interest rates, the upcoming elections, the war in Iran, and tariff regulations – many transactions are still being completed. Banks are once again active in lending, albeit more selectively. Once liquidity returned to the market, the challenges of the 'maturity wall' faced by most banks led to a significant outflow of capital.
- —Citizens Bank manages a national CRE strategy with a $25 billion portfolio.
- —The acquisition of Investors Bancorp in 2022 doubled the bank's CRE portfolio and shifted its focus to multifamily properties.
- —The approach to risk assessment in commercial real estate lending has not fundamentally changed significantly.
