US commercial real estate is headed for a crisis

Risks that US commercial banks are overexposed to commercial real estate (CRE) have intensified as the global pandemic upended long-held economic assumptions of perpetually subdued inflation, low interest rates and job in office. An analysis by The Conference Board suggests that more than $1 trillion in CRE loans will be sold in the next two years, and a growing number of banks, primarily regional and community banks, are at risk of having insufficient capital cushions. Executives should take steps now, such as scrutinizing banking relationships, extending debt maturities and securing adequate working capital, to mitigate the potential fallout.