$80 Billion Oversight Affects Commercial Banks’ Current Ability to Fund CRE Loans

As commercial real estate market takes a (very) slow turn for the better, its impact on the US economy is thrown into sharp relief— and its effect has been pretty substantial. A reported $80 billion attributed to commercial real estate has been lost (yikes!) to commercial banks and nearly 1,200 of those banks at the end of 2010 occupied high CRE loan concentrations. These loan concentrations are thought to be the primary cause of bank failures and its been estimated “that banks have taken roughly 40% to 50% of the CRE losses that they will realize over this cycle.”

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