Over the next few years, the U.S. commercial real estate market will face a monumental challenge as loans worth approximately $900 billion come due. This comes at a time when creditors are already struggling to avoid significant losses on underutilized office buildings due to the pandemic. The commercial mortgage-backed securities (CMBS) market, which provides crucial funding for landlords, is particularly vulnerable to these risks. As credit conditions continue to tighten, office landlords must brace themselves for significant pain in the near future.

The collapse of Silicon Valley Bank (SVB) and Signature Bank has sent ripples of volatility through the US banking sector. With regulators taking control of these banks to stop a contagion from spreading, mid-tier and regional banks are facing downgrades, and the Federal Reserve's Discount Window is seeing record-high draws against it. While the commercial real estate sector may not see immediate repercussions, the rising inter-bank competition for customers seeking higher rates on savings accounts may create unexpected pressures on smaller regional banks if deposits shift suddenly.