Commercial Real Estate Faces Risk of 2008-Style Crash, Putting Hundreds of Billions in Loans and Regional Banks at Risk
• Commercial real estate faces biggest crash since 2008 financial crisis, putting $160B in bank losses at risk • 14% of all loans and 44% of office loans are in negative equity due to rate hikes and remote work • 10-20% of commercial real estate loans could default, on par with 2008 crisis • Additional losses could make 31-67 regional banks insolvent, with 340 more at risk • Banks already facing stability issues - Moody's lowered ratings for 10 banks in August partly due to higher asset risks