Commercial Real Estate Crash Threatens $160B in Bank Losses

Banks are facing potential losses of up to $160 billion on loans to the commercial real estate market as landlords prepare for a wave of defaults in the coming year. Researchers from Columbia, Stanford, the University of Southern California, and Northwestern estimate a 10% to 20% default rate on commercial real estate loans, equivalent to $80 billion to $160 billion in bank losses. The struggling commercial real estate sector, impacted by post-pandemic office vacancies and interest rates, is facing significant challenges in its recovery.