- US banks worried about falling commercial property valuations, particularly offices.
- Rising interest rates and remote work due to the pandemic affecting valuations.
- Financial executives reassured investors that holdings are broadly distributed among banks and other institutions.
- Commercial real estate loans account for about 40% of smaller banks’ total lending.
- Investor jitters increasingly widespread, with commercial real estate identified as most likely source of systemic credit event.
US banks on alert over falling commercial real estate valuations
US banks increase provisions for losses on commercial real estate loans as office valuations drop amid rising interest rates and remote work due to the pandemic.