“You’re already seeing credit tighten up because the easiest way for a bank to retain capital is not to make the next loan,” said Dimon. About 80% of all bank loans for commercial properties come from regional banks, according to Goldman Sachs economists. Lending to commercial real estate developers and managers largely comes from small and mid-sized banks, where the pressure on liquidity has been most severe. Recent banking stress has significantly added to those woes. The Fed’s efforts to fight inflation by raising interest rates have also hurt the credit-dependent industry. Office and retail property valuations have been falling since the pandemic brought about lower occupancy rates and changes in where people work and how they shop.
It could be very isolated it won’t be every bank.”
It’ll be certain locations, certain office properties, certain construction loans. “The off-sides in this case will probably be real estate. What’s happening: “There’s always an off-sides,” Dimon said, using Wall Street jargon for an indirect consequence. The regional banking crisis is having a knock-on effect on commercial real estate lending, Dimon warned at his company’s shareholder meeting on Monday. Economists are concerned about the $20 trillion commercial real estate (CRE) industry and so is JPMorgan Chase CEO Jamie Dimon.
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