US banks selling Commercial Real Estate loans underscores tighter credit conditions
The recent sale of a portfolio of floating-rate construction loans could be the start of banks unloading commercial real estate (CRE) loans. With the ongoing banking turmoil, US banks, many regional, may be stepping up sales in order to reduce exposure to the real estate industry.
What you will learn:
- As of Q1 2023, the largest share of commercial and multifamily mortgages, about 40%, is backed by banks. As we head into 2024 and beyond, the majority of loans set to mature are backed by banks as well. By 2026 and 2027, more than half of the maturing loans will be backed by bank lenders.
- Thankfully, bank delinquency rates on commercial and multifamily mortgages remain low but have increased recently. Looking at outstanding real estate distress paints a worrisome picture for the office and retail sectors. That worry only increases for the office sector when we look at potential distress.
- The bank loan disposals over the past several months are evidence of the impact from tighter credit conditions on CRE. Elevated interest rates and CRE price declines are forcing banks to assess, and possibly offload, some of their CRE debt.
Tags:
Related Services

Post
Silver lining for China’s residential real estate sector
Residential real estate commencements (floor area) are expected to pick up over 2025. However, activity will remain at structurally lower levels, with Chinese authorities expected to maintain their goal to clamp down on speculative demand.
Find Out More
Post
Downside risks for Asian industrial real estate markets
The 'liberation day' tariffs have been postponed, but the existing tariffs and those likely forthcoming present significant downside risks for most Asian industrial real estate markets. Reduced business investment, weaker confidence, and risk-off sentiment alone will inflict a demand shock on industrial and logistics operators, with expansion plans likely on hold.
Find Out More
Post
Australia’s housing policy looks to fix symptom, not cause
Housing will be a key battleground in May's Federal Election, with both the incumbent Labor Government (ALP) and the Coalition (LNP) firming their stances in recent days.
Find Out More