CRE exposure · Multifamily Strategy Community

CRE exposure

Florida Atlantic University data shows 1,788 U.S. banks have commercial real estate exposure exceeding 300% of their equity – up from 1,697 last quarter. Of those, 504 exceed 500%. The FDIC also reports $306 billion in unrealized losses across the banking system and 60 banks on its problem list.

With $900 billion in CRE debt maturing this year at elevated rates and office delinquencies running above 12%, many of these loans simply can’t be refinanced at current values. The buildings aren’t worth what the loans say they’re worth.

Be careful out there, but there’s also opportunity in the ability to solve a troubled owners problem on a good acquisition.

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