Banks’ Commercial Real Estate Risks Are Uneven

W. Blake Marsh and Jordan Pandolfo
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W. Blake Marsh: https://www.kansascityfed.org/research-staff/w-blake-marsh/
Jordan Pandolfo: https://www.kansascityfed.org/research-staff/jordan-pandolfo/

Economic Bulletin, 2024, 4

Abstract: Investors have been acutely attuned to commercial real estate (CRE) risks recently due to higher interest rates and changes in how Americans work. On the surface, these risks may seem particularly concerning for small and regional banks, which tend to hold large concentrations of loans backed by commercial properties. However, we show that CRE risks can vary substantially across property types and geographic locations, suggesting that aggregate CRE exposure may be a poor measure of risk.

Keywords: commercial real estate; Investor sentiment; risk factor (search for similar items in EconPapers)
Date: 2024
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