Lenders' Insatiable Appetite for Commercial Real Estate
Banks' Commercial Real Estate Real Estate Owned (REO) by the Numbers | Sam Chandan crunches the numbers on banks' CRE REO holdings, finding that 95 percent of institutions had less than $5 million in commercial properties on their balance sheets at the end of Q1'11. At the other extreme, the nine institutions with the largest REO balances had $2.5 billion of commercial property.
From a policy perspective, Dr Chandan explains that the wide distribution of CRE REO is both problematic and beneficial. On one hand, it means that thousands of institutions are holding non-performing commercial real estate. On the other hand, it means also means that CRE REO balances are relatively small for most of these banks.
Read the Chief Economist column, Banks' CRE REO by the Numbers, at GlobeSt.