CRE

Commercial real estate portfolios have held up better than expected during the pandemic. But rising delinquencies and fears of a delayed economic recovery are renewing questions about credit quality.

While banks are reporting steady declines in deferrals, hard-hit borrowers such as airlines, commercial real estate developers and hotel operators will almost certainly struggle to regain their footing.

The agency’s second in-depth study of the community banking sector pointed to continued challenges for local institutions from the pandemic and other headwinds, but many smaller banks are reaping the benefits of M&A and holding their own against larger competitors in key lending categories.

The economic fallout from COVID-19 has highlighted systemic concerns about commercial real estate exposure, business debt and short-term wholesale funding, the Financial Stability Oversight Council said in an annual report.

On Jun. 30, 2020. Dollars in thousands.

While national banks have remained strong during the pandemic, they are still navigating risks from a murky credit environment and other potential warnings signs, according to a report by the Office of the Comptroller of the Currency.

Many of the Buffalo, N.Y., bank’s commercial loans have exited forbearance granted in the early days of the pandemic — except hospitality and retail, which were given longer dispensation.

One could change how commercial property is taxed, the other could change rent control policies. Both might affect financing.

The Charlotte, N.C., company recently closed on a sale of its Cohen Financial platform to SitusAMC.

More than a third fear the fallout from the coronavirus pandemic could drag into 2022 or later, and they are most worried about commercial real estate loans, according to a Promontory Interfinancial Network survey.