High interest rates, shifting demand for office space and signs of weakness in the multifamily sector have led US regulators to increase their focus on banks' exposure to commercial real estate, and subject an increasing number of institutions to heightened capital requirements.
The regulatory focus has resulted in slower loan growth as banks have tightened lending standards, while higher rates have hurt borrower demand, property values and transaction volumes. However, many banks have built sizable loss reserves for loans tied to office space and increased reserves for all CRE loans.
Publicly traded REITs have faced pressure in the market as well and most entities continue to trade at significant discounts to their net asset values, but their fundamental performance has held us thus far. Implied capitalization rates within the sector are up significantly compared to their pre-pandemic levels, however, they have largely flattened out in recent quarters.
S&P Global Market Intelligence research analysts surface key insights on commercial real estate performance at banks and how publicly traded REITs can serve as a leading indicator to the private markets. The webinar will conclude with an overview of how to leverage various SPGMI data solutions to better understand the commercial real estate market at the industry, company, and property/instrument level, and show how banks can identify the right lending opportunities in their markets, targeting commercial properties coming up to maturity, small business opportunities, and C&I loans.
