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Regional Banks Scramble to Unload Commercial Real Estate Loans, Fearing New Crisis

Regional Banks Scramble to Unload Commercial Real Estate Loans, Fearing New Crisis
A pedestrian walks by a commercial property for lease in San Francisco on Oct. 27, 2022. Justin Sullivan/Getty Images
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The work-from-home trend has been taking its toll on office landlords and is now making its way through to banks’ commercial loan portfolios, leading some analysts to predict that more trauma could be on the way for regional banks this year.

And in the current climate of bank failures, short sellers, and nervous depositors, banks with large exposures to commercial real estate (CRE) loans are racing to clean up and sell down their loan portfolios in hopes that they will not fall victim to another round of bank runs.