In a matter of nine days, bank runs and global financial distress saw regional U.S. banks like Silicon Valley Bank and Signature Bank go under, while European regulators helped to broker a deal for UBS to buy rival giant Credit Suisse, which had just collapsed.
While central bankers and policymakers alike try to assess what type of economic fallout could come from the March bank runs, the commercial real estate industry is already bracing for pain. Even before these bank failures, commercial office space defaults were rising as owners got squeezed by high vacancy rates, falling property values, and higher interest rates. That’ll only intensify if these bank woes see lenders further tighten lending standards for commercial real estate (CRE) loans.
