“The Real Estate Crisis Looming Over Banks”
February 12, 2024
“…Fears are now rising among investors over the United States’ distressed commercial real estate sector. This comes as a crucial lifeline created during last year’s banking crisis is set to expire.
N.Y.C.B.’s shares plunged as much as 15 percent in premarket trading after the downgrade, before rebounding. The stock has plummeted roughly 60 percent in the past week after the lender reported dismal results, especially stemming from its exposure to souring commercial real estate loans…
Plunging office occupancy rates and high interest rates are a big reason. The shift in working practices after the height of the coronaviruspandemic [LOCKDOWNS] has roiled the commercial real estate market and lenders could face a “maturity wall” of as much as $1.5 trillion in commercial real estate loans set to come this year and next. (U.S. regional banks provide the bulk of such loans, putting them at particular risk.)…”