The Trump administration's effort to block foreign students from attending American universities is hitting the commercial real estate market.
M&T Bank, a regional bank in the Northeast and mid-Atlantic, recorded a loss on a loan to a university's project to construct housing for foreign students, a company executive said during an earnings call this week.
"Now that the need for foreign students isn't there anymore, that project isn't as profitable as it was before," Daryl Bible, chief financial officer at M&T, said on a conference call.
Bible did not identify the university, disclose the amount of the loan or provide details on the status of the project. The loan was made through the Buffalo, New York-based company's M&T Realty Capital Corp.
M&T and the White House did not respond to CoStar News' requests for comment.
The U.S. State Department issued about 12,700 fewer F-1 visas in May compared to a year ago, which may indicate a decline in the number of international students attending U.S. colleges this fall, according to Inside Higher Ed.
The multifamily loan for student housing was one of four credits that M&T Realty Capital booked as a loss during the second quarter, Bible said. M&T recorded charge-offs totaling between $15 million and $16 million for the loans, he said. A charge-off is a debt that a bank has written off as a loss and considers unlikely to be collected.
Another M&T Realty Capital loan the bank recorded as a charge-off was for a Fannie Mae-backed program called Pilot that provides "manufactured housing with pads," Bible said.
Fannie Mae provides financing for manufactured housing developments as part of its specialty financing programs.
The other two charge-offs were a loan for a senior living facility and for a renovation project "that had bad luck and had fire and flood issues and was behind schedule," Bible said.
Bible did not provide additional details on any of the four loans.
M&T Realty Capital issues commercial mortgages to developers and then sells the credits to Fannie Mae. M&T retains about a third of the loans' risk on its balance sheet, while Fannie Mae holds two-thirds of the risk. M&T Realty also earns fees from the loans.
Before the spate of charge-offs in the second quarter, M&T "had very minimal losses at all in this portfolio," Bible said. M&T Realty Capital was founded in 2003 and had charge-offs totaling about $7 million through March 2025.
M&T Realty Capital is "really important to our strategy" in the commercial real estate sector, Bible said during the call. "We can serve a lot of clients with permanent financing by selling to the agencies and keep it off our balance sheet and just make it a fee income perspective for us. So, we love the business."
Two deals recently closed by M&T Realty Capital include a $415 million loan to the Brodsky Organization for a multifamily development in Brooklyn, New York, and an $18 million loan to DMG Investments for a multifamily project in Amherst, New York.