CRE

Comerica, which focuses on the energy sector, reported strong payment trends last quarter, while M&T, which concentrates more on real estate, showed deterioration. The divergence reflects varying exposures to sectors hit hard by the COVID-19 recession.

Even as lockdowns ease, the trend toward remote work poses challenges for building owners and the banks that lend to them.

On Dec. 31, 2020. Dollars in thousands.

The agency's plan would strengthen requirements that banks use a minimum amount of their real estate for the business of banking, but three grade groups say banks need flexibility in the pandemic to manage occupancy.

Community banks, which for years have relied heavily on commercial real estate lending, have been tightening underwriting standards, conducting more frequent loan reviews and stepping back from certain subsectors to minimize their credit exposure.

Already contending with stressed retail, hotel and restaurant loans, bankers are beginning to view office lending — historically a safe bet — as increasingly risky as companies of all types rethink their space needs.

The Federal Reserve warned of significant risks of business bankruptcies and steep drops in commercial real estate prices in a report published on Friday.

On Sep. 30, 2020. Dollars in thousands.

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.