US banks’ exposure to office losses ‘may be worse than feared’, say researchers

Big lenders are providing credit and loans to Reit property trusts under pressure from working-from-home trend and borrowing costs

The Manhattan skyline from Gantry Plaza State Park. Stock image

Todd Gillespie

Large US banks may be more exposed to commercial property (CRE) than regulators realise because of credit lines and term loans they provide to real-estate investment trusts, a study said.

Big banks’ exposure to CRE lending grows by about 40pc when that indirect lending to real-estate investment trusts (Reits) is added, wrote researchers including Viral Acharya, a professor of economics at New York University.