Commercial Real Estate Faces Uncertainty Amid Bank Jitters: 3 Charts Highlight Risks.
Jitters in the banking sector and higher interest rates could spell trouble for the $5.5tn US commercial real estate debt market. Small banks have become key players in commercial real estate over the past two decades, growing lending in the sector by nearly 20% in March from a year before. Meanwhile, the roughly $670bn commercial mortgage-backed securities (CMBS) market is also under scrutiny, with concerns that tenants won’t need as much office space as in the past, which could drag down property prices and hurt landlords with billions of debt coming due in the next few years, likely at higher rates.