Non-Performing CRE Loan Problem Won't Go Away

The CRE Office market is in a tough spot. Many cities have an abundance of older office properties with elevated vacancy rates that simply can’t attract tenants because tenants prefer to lease new structures. I don’t have access to property-level CRE data as I don’t subscribe to any of the CRE information services, including CoStar (which will see Revenue growth slow in 2024). However, one does not need property-level data to know that the CRE situation is not a positive story. The high-level takeaway is that non-performing CRE loans are growing in Dollar terms.

• Look at Bank of America’s (BAC) non-performing CRE loans. Double-digit percentage sequential growth and triple-digit percentage (611%) year-over-year growth in the December quarter. BofA is not unique in this regard.

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