Real Estate Loans: Lenders Brace for Impact Amid Market Concerns.

Commercial real estate lenders are preparing for an increase in bad loans in their portfolios, which could limit their ability to provide financing at a time when borrowers are already having trouble getting it. Banks and commercial mortgage REITs have been adding to their best-faith estimates of future bad loans. The bad-loan reserves are required under a new rule from the Federal Reserve and other regulators to prevent some of the mistakes from the Great Financial Crisis. The new accounting standards could make it more difficult to write new loans, reducing the capital a lender has on its books.