From Wall Street Journal:



In 2023, commercial real estate faced challenges such as vacant offices, falling apartment rents, and fire-sale prices, which raised concerns about the market’s health. Despite these tough headlines, banks’ loans to the commercial real estate market saw an increase over the year. So-called CRE loans at banks grew over 3% compared to the previous year, nearly matching the increase in loans to consumers. Additionally, construction-and-land development lending within CRE also experienced a significant increase of over 9%.

The rise in CRE loans at banks stood in contrast to a more than 1% decline in general commercial-and-industrial corporate lending, as per weekly Federal Reserve data through Dec. 6. Overall, the increase in CRE loans and construction-and-land development lending indicates a level of confidence and investment in the commercial real estate market, despite the challenges it faced throughout the year. The growth in these types of loans suggests that despite the tough headlines, there is still optimism and opportunities within the commercial real estate sector.

In summary, despite tough headlines and challenges faced by the commercial real estate market throughout 2023, banks’ loans to the market saw an increase. CRE loans at banks grew over 3% compared to the previous year, with construction-and-land development lending within CRE experiencing a significant increase of over 9%. This data suggests that there is still confidence and investment in the commercial real estate market, despite the difficulties it faced.



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