Charlie Munger believes there is trouble ahead for the U.S. commercial property market, Invest-Gate reports.

The 99-year-old investor tells the Financial Times that U.S. banks are packed with “bad loans” that will be vulnerable as “bad times come” and property prices fall.

Charlie Munger says, “It’s not nearly as bad as it was in 2008,” “But trouble happens to banks just like trouble happens everywhere else.”

Munger’s warning comes as U.S. regulators have asked banks for their best and final takeover offers for First Republic by Sunday afternoon, the latest in what has been a tumultuous period for midsized U.S. banks.

Berkshire Hathaway, where Munger serves as vice chairman, has largely stayed on the fringe of the crisis despite its history of supporting American banks through times of turmoil. Munger, also Warren Buffett’s longtime investment partner, suggested that Berkshire’s restraint is partially due to risks that could emerge from banks’ numerous commercial property loans.

Munger says, “A lot of real estate isn’t so good anymore, and we have a lot of troubled office buildings, shopping centers, and other properties. There’s a lot of agony out there.”

Noteworthy that this comes after the failure of Silicon Valley Bank in March, attention has turned to the First Republic as the weakest link in the American banking system. Shares of the bank sank 90% last month and then collapsed further this week after First Republic disclosed how dire its situation is.