Goldman Sachs Chief executive David Solomon said on Monday his bank would publish discounts on commercial property holdings as the industry grapples with higher interest rates.

Solomon told CNBC’s Sara Eisen that the New York-based firm will book impairments on commercial real estate loans and equity investments in the second quarter. Financial companies recognize loan defaults and declining valuations as write-downs that affect quarterly results.

“There’s no question that the real estate market, and commercial real estate in particular, has come under pressure,” he told CNBC. “Screaming in the street.” “You will see some reductions in loans that would go through our wholesale provisioning” this quarter.

After years of low interest rates and high office building valuations, the industry is in dire straits. painful adjustment to higher borrowing costs and lower occupancy due to the shift to remote work. Some property owners preferred to walk away from foreclosure rather than refinance their loans. The default has just started to show in the banks’ results. Goldman reported nearly $400 million in real estate loan impairments in the first quarter, according to Solomon.

In addition to its lending activities, Goldman has also taken direct stakes in real estate as it ramped up its alternative investments over the past decade, Solomon said.

“We believe that we and others are reducing those investments due to the environment in this quarter and in the quarters to come,” Solomon said.

While the write-downs are “definitely a headwind” for the bank, they are “manageable” in the context of Goldman’s overall business, he said.

However, they may be more difficult for smaller banks to manage. About two-thirds of the industry’s loans come from regional and mid-sized institutions, Solomon said.

“That’s something we’re going to have to deal with,” he said. “A few participants will likely be on their way to some bumps and pains.”

In a wide-ranging interview, Solomon said he was “surprised” by the resilience of the US economy and saw “green shoots” emerging in capital markets after a period of subdued activity.